Nationwide launches a 10 year fixed rate mortgage

Daft_Monkey

On April the 1st, Nationwide will be launching a new 10 year fixed rate mortgage @5.19% (unless it's a joke)
[url] http://www.nationwide.co.uk/mediacentre/PressRelease_this.asp?ID=657[/url]

ITtim

it looks good in theory doesnt it. might have to examine that further.

Joannaclaire

Interesting....

Peter-Pan_5

April fool,I think

paulocd

Anyone knows of good fixed for at least 3 years buy to let mortgages?
I need to re-mortgage my buy to let.

Please let me know.

payless

no joke-

in fact at present many of the longer term fixed rates are priced at or only slightly above the lenders shorter fixed

remember as with most fixed rates they will lock in you for the fixed period

herbiesjp

Paulcod - would need a little more information on the situation to be able to give rates.

MarkyMarkD

I would personally suggest that it's only worth fixing for as long as 10 years if you are absolutely certain you won't want to redeem during that period. That means it would be best for someone with a relatively small mortgage with only 10 years left to run, who has no chance at all of receiving lump sums to pay it off.

Anyone with a larger mortgage, or a chance of a windfall, would do better to keep the flexibility associated with other mortgages and would find it cheaper to move between shorter-term discounted rates, IMHO.

Of course, this isn't mortgage advice and you should speak to a qualified adviser if you want help with your mortgage arrangements.

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By the way, if you need to borrow over 90% of the value of your property, this product is particularly bad value as Nationwide charge an extra 0.5% for every year of the 10 year fix period - that's 5% extra in total. This is FAR more than paying a MIG charge (of typically 1.5%) to another lender who charges MIG.

Nationwide irrationally charge the same 0.5% on every term of fixed/discounted loan - so people taking short-term products pay only 1%, whilst those going for longer-term fixes have to stump up the whopping 5%.

raeble

Hmm but how many people would have a chance of a windfall realistically. Also you know how much you are going to be paying for the next ten years which would probably be better for those on the larger mortgages as those are the folks that seem to get stung when interest rates go up. I thought the article also said you could over pay or underpay. Ten years isn't really that long for a fixed rate mortgage, it's the same as getting two five year fixed rate mortgages. It's long here but don't they have fixed rate terms of 25 years on the continent and in the states?

Woby_Tide

raeble wrote:

Ten years isn't really that long for a fixed rate mortgage, it's the same as getting two five year fixed rate mortgages. It's long here but don't they have fixed rate terms of 25 years on the continent and in the states?

Exactly though, for the UK it's fairly long, isn't the average length of keeping a mortgage something like 7 years according to Charcol? The difference is that with 2 five year fixes you can escape without penalty after 5 years, ten year fix you can't, not sure many people can predict with any amount of confidence their circumstances in 10 years time(probably even 5 or 6)

MarkyMarkD

You can overpay by £500 per month, but not larger amounts if you inherit (say).

I agree that some people will happily pay for certainty - but 10 years really is a long time to fix your outgoings for. If we join the Euro and mortgage rates fall by 1-1.5% (which isn't totally unrealistic), you would feel pretty sick about being tied in for 10 years at 5.19%.