10 year fixed deal mortgage

[Froghat]

I’ve been quoted 4.63% for a ten-year fixed and the broker is recommending against it, saying the rate is too high and I should go for 5 or 2 year. Does anyone have any thoughts on fixing for this period? I know rates are never going to go back down past the low 3s and the long fixes are always going to be slightly higher. I’d be interested to know what others think.

BTW this is for an intended purchase property, not a remortgage.

I wouldn't fix for 10 years. Wish I had 2 years ago though!

I've just completed on a 2 year fixed at 4.65% on an 80% LTV.

I would also really shop around with your broker. I had one that I had been using for years who kept on saying that I'd never be able to get one below 5.8%. Tried another who said the same and then read an article that reccomended a few.

The rate was on for less than a week so I would also be really vigilant with checking rates daily because they move so fast.

What is your LTV?

I fixed for 5 years at 3.94 last year. I probably wouldn't have done 10 years. I usually don't do 5 years either but I figured it might be worth it and I can always pay the early exit fee if things change a lot.

We remortgaged last October and took a 10 years fixed deal but only because we got a 2.05% rate. At 4.6 I probably wouldn't

Does it come with early redemption fees? That would be a bigger worry to me than the rate for a 10 year fix.

Was that definitely last year you fixed fit that rate? Sounds incredibly low!

Fix for five and put money aside in case rates are higher in five years.

We fixed for 10 years but just before the big jump so our rate is 3%. I wouldn’t fix for that long at 4.6.

Definitely last year - we were offered a much better rate to stay with the same provider than what other banks were offering/the same bank offering new customers at that time

We took 10 years at 2.7% last August. Won't need it as we overpay and will be off in 4, but we liked the certainty while accepting that the rate was, at that time, a bit toppish. The early redemption fee is neither here nor there on the amount we have mortgaged.

We fixed for 10 years, but I think it was back in April 2022. Rate was very low, but can't remember what exactly 🤔

And we do have a hefty early redemption fee of quite a few thousand pounds, but apparently we will be saving more than that in interest over the 10 years due to the low fixed rate!

LTV is 45%.

That’s incredible. Lucky you.

I did a 10 year fix at 5.15% in the 2000s… the surety of payment was a no brainier for me, and with the mortgage being an offset I swiped a decade off the term by piling in.

no one believed anyone when they warned the low rates wouldn’t be here forever, and here we are, people suggesting a sub 5% rate isn’t a keeper. It feels like we’ll never learn.

"no one believed anyone when they warned the low rates wouldn’t be here forever, and here we are, people suggesting a sub 5% rate isn’t a keeper. It feels like we’ll never learn."

Some people still want to play call my bluff with the bond markets it seems?

Also take into account that mortgage advisors and IFAs aren’t your friends.

The reason why they suggest 2 year periods is mostly because they will get repeat custom in arrangement fees on a regular basis.

I told a friend of mine to fix for 10 years in 2021, and at 1.99% the mortgage advisor advised against it and dug his heels in. I told my friend to go tell him to do one and go with someone else so he did and he fixed at the same rate. He’s glad he did now.

They do the same with pension transfers too, they’re not interested unless they get annual management fees. By all means take advice, but shop around and make sure they’re not leading you up the garden path.

Brokers get commission every time they sell a mortgage so bare in mind It is in their interest to suggest shorter term fixes in the hope you will return to them in a couple of years. That said, I probably wouldn't want to fix for 10 years at that rate and would take the risk on a shorter fix in the hope rates got even a little lower later.

How much do you need peace of mind? That’s the important question. It’s not an awful rate but it is a gamble. Would you be upset in five years time if rates were 3.5%, if they were 4%? Or would you be ok with that. I always fixed for five years and rates kept coming down, there were definitely times when I’d have been better off if I’d chosen a variable rate, etc. but it never bothered me…..I was happy paying a bit more for the security. By the time rates went up I’d paid the mortgage off, so my gamble never paid off I guess but I’m still not fussed.

Broker should be asking your priority for the mortgage and recommending based on that not telling you what to do.

Depends what you think rates will do over next 10y - which is more important - to have long term stability at the risk of not being able to benefit if rates come down?

Also find out if it's portable in case the new house doesn't work out and you need to move again for any reason.

I'm not one for aligning myself with this particular posters predictions. However I have to agree with his comments about the bond markets.
It's entirely possible you wouldn't be offered a 10 year fix at that rate in a few months time and that rates might be higher than they are now in the UK, at least in the short term. The US average 10 year rate is currently nearly a full 1% higher than what you have there.
If you prefer the security of a long term fix, and also plan to overpay. It could be the right product for you. A lot of Brokers are still struggling with the changes in global market borrowing conditions imo. Also the lenders have been on a mission for volume - believing that base rates were headed down considerably and competing hard for a reduced pool of clients. They seem to be showing signs of backing away from that recently.

Can’t believe more people didn’t do long fixes when the rates were so low they couldn’t really have got lower. We fixed for 10 years in 2018. Didn’t take any advice professionally.

I don’t think it’s so hard to believe. Long fixes are great if you know you will stay in your house for a good amount of time and won’t need to leave for any reason. If you need to sell up and split assets because of divorce or want to downsize because of illness or an unexpected drop in income, a long fixed rate with a hefty charge is a disaster. I have had times where I have kicked myself for being tied to a 5 year fix, even though the rate was/is relatively favourable. People don’t just choose a two year or a tracker mortgage because they are fools that bet on the bond market, sometimes flexibility is important too.

We found an article online that did a checklist of circumstances that meant a 10 year fix made sense and every circumstance applied to us.

If we had played it safe and gone for 5 year fix our deal would have ended smack in 2023 mortgage hike zone.

I know that seems strange but sometimes people have good reasons for not wanting a 10 year fix. They may only expect to stay in the property for a few years for example and not want to pay a high redemption fee to get out of the deal before the 10 years are up.

Sounds like you made a smart decision for your circumstances though.