10-year fixed mortgages at a competitive high | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 12/08/2019

Homeowners looking to lock their mortgage rate into a long-term period to provide peace of mind during the current economic uncertainty will be able to benefit from increased competition within the 10-year fixed rate mortgage market.

The latest research from Moneyfacts.co.uk shows that competition within the 10-year fixed rate sector is at its highest level in over a decade, with more deals available now than since Moneyfacts electronic records began in 2007. In fact, today they are currently 157 10-year fixed rate mortgage deals on offer, while the average rate has fallen from 3.10% recorded in August 2018 to 3.01% available today.

10-year fixed rate mortgage market analysis 

  Aug 14 Aug 17 Aug 18 Today
Average mortgage rate 5.09% 3.23% 3.10% 3.01%
Number of mortgages available 22 80 139 157


Why choose a 10-year fixed rate mortgage?

A 10-year fixed rate mortgage is a good option for homeowners who want the security of knowing what their mortgage rate will be for the long-term. It is often a popular choice during economic uncertainty as it offers stability during a time when rates can fluctuate. Saying this, homeowners need to be aware that while locking a rate into a long-term period protects them from rate rises, if mortgage rates fall during the term, they could find themselves paying above-average rates.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Borrowers may well be thinking of different ways to safeguard themselves from potential rate fluctuations in the market, or even for some peace of mind during a period of economic uncertainty. Thankfully, lenders have expanded their mortgage range to accommodate consumers searching for a lengthier fixed term – including a 15-year mortgage launched by Virgin Money within the past fortnight.

“Today, Newcastle Building Society has launched two 10-year fixed rate mortgages, one available at 80% loan-to-value and one at 90% loan-to-value, charging 2.85% and 2.89% respectively – the latter becoming the lowest rate in its sector. These deals also allow borrowers to repay their mortgage after five years without penalty, whereas many other lenders apply a redemption charge up to the end of the 10-year term.

“A decade-long fixed rate mortgage is no doubt a big commitment, so borrowers must feel confident that their circumstances are unlikely to change to avoid the expense of refinancing earlier than expected. There is a much larger choice of mortgages within the five-year fixed market and these should ideally be considered as an alternative.   

“As with any mortgage, it is important that borrowers weigh up the overall true cost of any deal and make every attempt to overpay their mortgage to reduce the amount they owe – especially if they lock into a low rate.”


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