10 year fixed - any reason not to?

chrisw99

I'm currently just over half way, 13 years down, 12 years to go exactly

I'm on a Nationwide tracker, at 2% above base rate, so enjoying 2.5% as things are now.

I've just been into their switching page, and I can currently switch to a 10 year fixed rate at 2.7%, i.e. paying just £5 ish more a month than I am on now.

Is there any reason NOT to switch to this? Obviously if the base rate stayed at 0.5% for the next 10 years, I'd be paying £5 x 12 x 12 = £720 more. But they are going to go up at some point in the next 10 years... (aren't they???) Even the first 0.5% hike would take it above what that 10 year fixed monthly fee would be.

The only downside I would see was that I possibly lose some benefits such as overpayments, mortgage holidays. I forgot to check what the 10 year fixed product actually included.

Historybuff

I did a 10yr fixed deal with Nationwide in 2006 for what seemed a great interest rate at the time of 5.3%. That wasn't so clever when interest rates fell to all time lows and I was stuck in a deal with big exit charges! I've just gritted my teeth and paid up. I would never again get fixed into such a long mortgage deal. I very much regret it.

ourcornercottage

Have considered this too, now considering 5 year fix and OPing like mad. Going to fix by end of year.

LadyGnome

It's unlikely that retail interest rates are going to fall much further as there isn't really anywhere for them to go given that the BoE is at 0.5%.

I think the key factor for me would be your ability to overpay and the cost of getting out of the fix. If you came into some money or got a better job / payrise would the terms of the fix make it uneconomic for you to reduce your mortgage.

I currently fix for 2 years and might go out to 5 but would feel 10 years was a bit too long for me.

Firegirl

I asked my financial adviser about this and he said that when interest rates do start to rise they will likely be slowly and because of other market conditions I would be unlikely to be better off. I was looking at approx 3% 10 year fixed and I'm currently on variable 0.49 above base rate

getmore4less

With a variable rate of base+2% and the option of a 10y fix at 2.7% I think I would go for it with a 12y term.

Do remember you lose some of the other features of the rate you have.

I would not worry about the overpayment issue mentioned if rates go up you will have saving rates at more than the mortgage.

You can already get rates higher than 2.7% with regular savers/current account shuffling.

£5pm extra is a mortgage around £54k

chrisw99

Thanks for the replies. Lots of things to consider there. I need to go through the whole online switching process again to see more details of the 10 year product, it was a bit of a long winded thing to do!

somethingcorporate

In your situation I would do it in a heartbeat.

£5 a month for security of a very low rate for 80% of the rest of your term? A total no brainer if you ask me (assuming nothing else about it is too penal).

iwannanicerlife

I am in almost the exact same position as the OP and have too been considering the 10yr fix. Will be interested to see other points of views, as it's something that I'm seriously considering

getmore4less

Put some real number up like the size of the mortgage, payments, max you could pay and someone can run some numbers.

System

I personally wouldn't want to fix for anything longer than 5 years. Circumstances can change year in and year out so being fixed into something for 10 years just doesn't sit well with me. What sort of deals / % can you get over 5 years if that's a possibility?