Do fixed rate mortgages exist for long periods like 20+ years

CreditCardChris

An American youtuber I watched called Graham Stephan has several mortgages and he gets mortgages at 3.5% - 5% fixed for 30 years. But I've gone onto some market comparison sites and individual mortgage websites and I can't find anything even remotely close to 30 years fixed. Most of the ones I'm seeing are fixed for 2 years or 5 years, so do long term fixed interest mortgages exist in the UK or is this an mostly an American thing?

His logic is simple, get a fixed rate mortgage now while the interest rates is very low. 

MovingForwards

There were 10 year fixed rates, before C19, but not for the lifetime of the mortgage.

MovingForwards

https://moneyfacts.co.uk/mortgages/10-year-fixed-rate/

fewcloudy

CreditCardChris said:

An American youtuber I watched called Graham Stephan has several mortgages and he gets mortgages at 3.5% - 5% fixed for 30 years. But I've gone onto some market comparison sites and individual mortgage websites and I can't find anything even remotely close to 30 years fixed. Most of the ones I'm seeing are fixed for 2 years or 5 years, so do long term fixed interest mortgages exist in the UK or is this an mostly an American thing?

His logic is simple, get a fixed rate mortgage now while the interest rates is very low. 

I would guess the ERC's if such a thing existed would be pretty brutal. And the BOE base rate might be low but the longer you fix for, the higher the rate on your product would be. And what if you wanted to move; quite likely in 30 years I'd guess?

CreditCardChris

fewcloudy said:

CreditCardChris said:

An American youtuber I watched called Graham Stephan has several mortgages and he gets mortgages at 3.5% - 5% fixed for 30 years. But I've gone onto some market comparison sites and individual mortgage websites and I can't find anything even remotely close to 30 years fixed. Most of the ones I'm seeing are fixed for 2 years or 5 years, so do long term fixed interest mortgages exist in the UK or is this an mostly an American thing?

His logic is simple, get a fixed rate mortgage now while the interest rates is very low. 

I would guess the ERC's if such a thing existed would be pretty brutal. And the BOE base rate might be low but the longer you fix for, the higher the rate on your product would be. And what if you wanted to move; quite likely in 30 years I'd guess?

Can't you sell your house if your mortgage is fixed rate? I think the ones I saw said after 5 years if you repay early you have to pay a 1% fee.

amnblog

There are a few 10’s on the market priced at nearly double the 5’s you may even find a 15.
I wouldn’t rely on YouTube for your financial advice however.

tacpot12

The UK is completely backwards in this respect. Mortgage rates are usually fixed for the life of the mortgage in the USA. It's another example of rip-off Britain. 

kuratowski

The US and UK markets are not comparable, the US mortgage market is heavily influenced by https://en.wikipedia.org/wiki/Fannie_Mae and https://en.wikipedia.org/wiki/Freddie_Mac.

Regardless, I think most people in the UK are put off really long fixes because, as amnblog said already, the rates are higher so it's a more expensive way to borrow.

Thrugelmir

tacpot12 said:

The UK is completely backwards in this respect. Mortgage rates are usually fixed for the life of the mortgage in the USA. It's another example of rip-off Britain. 

3.5% - 5% wouldn't be viewed as cheap in the UK. 

CreditCardChris

kuratowski said:

The US and UK markets are not comparable, the US mortgage market is heavily influenced by https://en.wikipedia.org/wiki/Fannie_Mae and https://en.wikipedia.org/wiki/Freddie_Mac.

Regardless, I think most people in the UK are put off really long fixes because, as amnblog said already, the rates are higher so it's a more expensive way to borrow.

This is actually not true if you do the maths. If you take out a 15 year mortgage the interest will be lower than a 30 year mortgage but your monthly repayments will be much higher. For example a 15 year mortgage may be £1000 a month repayments (excluding interest) but a 30 year mortgage might be £500 (excluding interest). If you take the 30 year mortgage and pay £500 a month but then invest the other £500 every month into the stock market, you'll actually end up with more money than you would have with the 15 year mortgage. 

Here's a screenshot of what I'm talking about 

And here's the video if you want to watch it yourself https://youtu.be/BJ3xhjqk52A?t=583

Also with a 30 year fixed mortgage you're paying off the value of your future home with the price of today's money. Inflation is important to factor in as well.

kuratowski

I have two things to say in response to that.

1. You have misinterpreted what I wrote.  When I said 'long fix' I was actually referring to the length of the fixed rate period, not the term of the mortgage, which is a separate matter.  In the UK, home buyers typically start out with 25-30 year mortgages.  The fixed rate period though, where it applies, usually lasts for between 2-5 years, at the end of which you typically renew or remortgage on another deal.
2. Before you get too excited about your 7% investment returns, you need to read up on endowment mortgage shortfalls.  This strategy is not risk free.