Is a 10 year fixed rate - too long?

[Woody2021]

Until recently, the idea of a 10 year fixed rate sounded nuts - we've either had 5 years, or, more recently 2 years.

But now with the increase in interest - which will add around £250 a month to our monthly payments - this ironically was closer to the figure we used to pay...but due to some changes in circumstances (having a second child & my wife becoming a stay at home due to childcare costs) and the cost of living - this figure will be much harder to pay.

Yet, now I worried by the currently climate and I'm concerned I decide whether it would be more senisible to lock in for a longer time...as a precaution.

Or am I being too cautious and rates will be better in 2 years...or 5 years...

What are peoples thoughts? Has anyone gone with a 10 year fixed rate themselves?

Obviously - I will seek professional advice too - I am just looking as to what other peoples thought are on the matter.

I looked into this but ours isn’t due for another year.

Im not sure many banks are offering 10 years, which suggests they’ll die out - it could be for two reasons, either the profit doesn’t sell or the product is no longer profitable.

What's it fixed at ?

It depends on the rate offered.

Given that rates are high at the moment and predicted to fall over the next couple of years, I would not be fixing for 10 years.

I fixed mine for 10 years when the rates were low. I’m on a low income and like the stability of knowing what is coming out

Not sure now is the best time, but previously we've always gone for a 20 year, best thing ever!

10 not 20.

depends on the rate

I wouldn’t fix for 10 years at current rates. We fixed for 10 years in August but got a rate of 2.75

It totally depends on a) the rate and b) your circumstances/plans.

It is not objectively 'too long'.

All financial decisions involve an element of luck - because if the market rises or falls in that period you might have done different things with your money had you known what was coming - you have to weigh up what matters most to you and identify your personal approach.

I wouldn't describe current rates as high, just returning to the long term historic levels, and I certainly wouldn't bank on them falling in the next 2 years. The fix would give you financial stability and your payments would be predictable. Hopefully over The same period your income would rise making you better off. As other posters said, it depends on the rate offered.

Definitely depends on the rate. We fixed for 10 years in the summer at 3.18% happy with that.
I (personally) wouldn't fix at anything higher than 5%

My understanding is that if you have to move and sell the house, you'd be trapped in a penalty for early repayment. 10 years is a lot time to be certain that you don't move.

We chose 2 years recently and plan to throw money at it. 10 years is too long for us at current rate offered. Under 3% and we would have fixed for longer.

Ten years is a long time to fix for, a lot can change in a decade and I'm not just talking interest rates.

What would the early repayment charge be on a ten year fix? They often drop incrementally by 1% for the term of the product, so on a ten year fix if you needed to exit the mortgage in the first year, you could have to pay 10%.

If you found yourself in a position where you had to either sell or move you could end up having to shell out thousands of pounds.

If you need to move you can usually port the mortgage although it's a bit more complex.

But if you need to completely sell up in case of divorce etc the ERC could be a huge issue. Maybe a 10year fix could keep you together?? We got a low one in the spring and have joked that we now cannot separate for ten years.... well it's not a joke, it's real.... but it's very very nice having a low rate and that peace of mind in terms of interest rates.

We have 2 10yr fixes. One from our first house which we ported and a second for the extra we needed to buy the house we're in now. They're at 2.69 and 2.59% which at the moment is great but was 1% higher than we could've got at the time.

Whether you should fix or not is a balance between the need for certainty (about your outgoings) and value for money (how competitive the rate is).

Historically interest rates are still quite low (they've normally been between 4-5%). That doesn't mean they won't fall again just that they might not.

How does the historic average compare to the rate you're being offered?

we're 7 years into a 10 year fix with first direct. We liked the security that it offered, we got a good rate that wasn't significantly more expensive than the best 5 year fixes available at the time, and in the current market it looks very favourable for the remainder of our fix.

We locked in knowing we had no intention of moving during that time and with the intention of aggressively overpaying, which we have done. We calculated that we could be mortgage free or as near as damn it by the time the fix ended, and that fortunately has proven to be the case. The interest we have saved through overpayments has negated almost all of the impact of having a higher interest rate than we would have paid had we gone for a shorter but cheaper fix back in 2015.

You have to do your sums to check that the maths makes sense for your circumstances, but I wouldn't discount a 10 year fix out of hand.

As others have said, I think it depends on the rate. We were lucky that we were in the window of being able to agree a new deal in the summer and did fix for 10 years, but at 2.70% which only worked out at about £40 more than what we were paying previously. We did so on the believe that rates were very unlikely to go much below that in that time.

We fixed for 10 years a couple of months ago, we got in just before the big rate increases thankfully so are at just under 3%. Rates may well drop below that eventually but we have quite a big mortgage as we only bought for the first time a couple of years ago so we wanted the security of knowing our payments were fixed for the foreseeable future.