10 year Fix - at 3.54%

Grass_Roots_2

Hi all - is anyone considering a 10 year fix?  I've just secured this rate through Nwide as my existing mortgage at 1.79% was coming to an end.

I usually fix for 5 years because it feels like a decent chunk of time but on this occasion I've gone for 10 years fixed at 3.54%to have certainty I can afford it at what feels will be a turbulent decade.  It's a hefty chunk at £370k outstanding and I have another 20 years to run although hope to make overpayments.  I also have 2 smaller mortgages for home improvements which have another 4 years to go fixed at 1.39%.  Our overall mortgage borrowing is £560k and we're under the borrowing is circa 50% of the house value.

I have no plans on moving in the next decade.  We're in our forever home.  I'm also planning on making overpayments on this largest mortgage of circa £500 per month.

Anyone have a crystal ball - have I been over cautious?  The alternative would be a 5 year fix at 3.36% and saving was circa £50 per month I think.

Grateful for any thoughts.  Whilst I've secured it I can undo it and switch to 5 years ahead of it commencing on 1st Jan.

RelievedSheff

We will have 10 years left to run on our mortgage term at the end of this fixed rate which runs out in May 2026.

If we could get a rate anywhere approaching that for a 10 year fix at that time then we will be grabbing it quickly.

Sg28

I took a 10 year fix 2 years ago at 2.29%. Worked out a great decision. 

But if it had gone the other way and rates stayed ultra low, I would still be happy with the certainty. 

They way I look at it is your are paying a bit extra for the security and comfort. 

Bluebell1000

I think it sounds like a good rate. You might want to look at whether you can earn more in interest putting £500 a month into regular savers instead of overpaying the mortgage?

biscan25

You'd be overpaying compared to what the market 'thinks'.
Based on swap rates,
5 year = 3.4% pa
10 year = 3.0% pa
so I'd expect the approximate price of a 5 year fix in 5 years time to be around 2.6% pa.

That said, the market will always be wrong (one way or the other), and there's so much to be said for certainty in the current climate. If I was in a forever home, I think on balance I'd be ten year fixing.