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

SouthLondonUser

PS Also this comic strip: https://www.alexcartoon.com/archive-result.cfm?action=search&qu=&start_date=2017-09-14&end_date=2017-09-14

Sistergold

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. 

A lot is likely to happen in 30 years why fix for that long?

[Deleted User]

Looking at the 15 year fix that Virgin launched about 6 months back, 95% fix was 4.58%. That's a heck of a lot more expensive than could reasonably be achieved from (say) a 5 year 95% fix. After 5 years, it's reasonably expected the LTV would be say 90% or lower - in which case you would be looking at rates in the 2-3% range based on today's prices - plus any cashback etc. you get from re-mortgaging.

If there was a significant reason as to why you either didn't want to remortgage, or felt you couldn't, then I could understand it. For example, if you believed you were looking to have say 3 kids and 1 income earner was to become a stay at home parent within the next 5 years, depending on the specifics of the case, you may well find it difficult to remortgage on reduced income.

But it'd be hard to receive accurate advise unless you declared all that, and if you did declare it, I can't imagine it'd be the most straightforward case to place!

For a relatively 'normal' situation (e.g. all applicants to continue working), then they just aren't priced competitively enough over here. I was looking at 10 year fixes as unless I progress my career considerably, I would put family over the 9-5 in future. But due to dropping LTV bands in that time (and the high markup anyway), I just couldn't justify anything over 5 years.

Also Virgin's ERCs were 8% for first 5 years, then 7% for the next 5 years, 5% for the next 2... so you're looking at remaining on that high rate for at least 12 years, or paying 5%+ (on top of an already high rate!) to get out. Even if you get out in the final 3 years, there's still ERCs to pay (3% with 3 years left, then 2% then 1%).

It seems like a nice little money maker for the bank, not too many upsides for the client. If you were very risk averse then I'd understand it, but you're talking about investing etc. - which doesn't fit that profile!