10-year fixed mortgage market flourishes | moneyfacts.co.uk
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Published: 10/01/2017

Given upcoming negotiations on the UK's future relationship with the EU, we are expected to have some uncertain times ahead. Borrowers are likely to be worried about how this will affect mortgage rates, and as a result, many will be looking for long-term mortgage repayment security to shield them from an unpredictable future. A 10-year fixed rate mortgage could be just the solution, particularly as our latest research shows that the market is flourishing.

Growing market

The figures show that the long-term mortgage market has transformed in recent years, with the number of 10-year deals available having risen dramatically as average rates plummet. As the table below shows, there are now 124 10-year deals available, up from 80 a year ago and a huge increase from the eight that were on offer in January 2014.

At the same time, the average 10-year mortgage rate has fallen by over 1%, down from 4.23% three years ago to just 3.20% today, which also marks a notable drop of 0.43% year-on-year. This means you can get long-term security for little more than an average five-year deal – additional figures reveal that the average five-year fixed rate now stands at 2.92% – giving you peace of mind for a minimal premium.

Jan-15 Jan-16 Jan-17
Average 10-year fixed rate 4.23% 4.17% 3.63% 3.20%
Number of 10-year fixed rate deals 8 77 80 124
Source: Moneyfacts.co.uk Compiled 10/01/2017

"The 10-year fixed rate market has been improving for some time now, with lenders trying to muscle in on this new area of competition," said Charlotte Nelson, finance expert at Moneyfacts. "This has caused this sector of the market to grow dramatically, and now means there is a great deal of choice for borrowers who are looking for the extra security a 10-year fixed rate gives."

Would you fix your rate for a decade?

Given the choice and low rates on offer, it certainly seems like a 10-year deal could be a good way to go! It can fix your mortgage rate, and more importantly your repayments, for a whole decade, helping you budget effectively and be safe in the knowledge that your payments won't jump up should the market change in the foreseeable future.

However, if you're thinking about taking the plunge, you may want to be quick about it, as Charlotte explains: "Despite the average 10-year rate falling year-on-year, it's started to rise slightly from a record low of 3.11% in November 2016 to 3.20% today. This increase may be an indication of what's in store for long-term fixed rates in 2017.

"Nonetheless, even with the slight increase in the average rate, borrowers could find that a 10-year fixed mortgage gives them the peace of mind that their repayment will not change, no matter what happens. Just bear in mind that, while we know rates cannot stay at these lows forever, we don't know when they will rise, or by how much."

You'll want to make sure that you're aware of the restrictions, too, with most 10-year mortgages requiring borrowers to be tied into the deal for the full term. This means you'll want to weigh up whether you'll need some flexibility in the decade ahead, as failing to do so could lead to a hefty early redemption penalty.

However, moving home need not dampen your 10-year mortgage plans, with our data showing that all 10-year products currently available offer some form of portability for those who may wish to move home (just be aware that affordability may need to be reassessed if you did).

Ultimately, "any borrowers considering this type of deal will need to puzzle through the maze and weigh up the odds to see if the gamble will eventually pay off," concluded Charlotte, but given the choice and rates on offer, it could be time to start doing your sums.

What next?

Compare the top mortgage rates to see if a 10-year deal could be for you


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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