Derin Clark

Derin Clark

Online Reporter
Published: 25/11/2019

Competition in the long-term fixed rate mortgage market has pushed down rates on 10 year fixed mortgages, research from Moneyfacts.co.uk reveals.

The research shows that, compared to a year ago, there are now more 10 year fixed rate mortgages on the market and average rates have decreased by 0.32% from 3.08% to stand at 2.76% today. In fact, in November 2018 there were 147 10 year mortgage deals available on the market, whereas today there are 158.

10 year fixed rate mortgage market analysis 

  May 18 Nov 18 May 19 Today
Average mortgage rate 3.11% 3.08% 3.00% 2.76%
Number of mortgages available 101 147 152 158

 

The best 10 year mortgage rates

While rates in the 10 year fixed chart are not as low as those being offered in the two and five year charts, there are still a number of highly competitive rates available for borrowers looking to lock their mortgage into a 10 year term. Halifax is currently topping the 10 year fixed mortgage chart offering 2.22% fixed until 28 February 2030 on a 60% loan-to-value (LTV). TSB also offers a competitive rate of 2.24% fixed until the 28 February 2030, also on a 60% LTV. Third in the chart is Yorkshire Building Society offering 2.29% fixed until 31 March 2030 on a 65% LTV.

 

Increase in long-term mortgages

During 2019, there has been an increase in products on all fixed mortgage terms above five years. Earlier this year we reported in the rise in competition in the 15 year fixed rate mortgage chart, with both Virgin Money and Yorkshire Building Society launching a range of 15 year mortgage deals. In addition to this, our research also found that there had been a month-on-month growth in seven year mortgages between July and August 2019. The increase in longer-term mortgages could be due to the current economic uncertainty and consumers wanting to fix their mortgage repayments into a long-term deal to protect against possible future rate rises.

Commenting on the fall in 10 year fixed mortgage rates, Darren Cook, finance expert at Moneyfacts.co.uk, said: “During a period of economic uncertainty, borrowers may be considering alternative ways to shield themselves against interest rate fluctuations and assure some stability in household expenses for the longer-term. A 10 year fixed rate mortgage is a large commitment, so potential borrowers need to feel confident that their circumstances are unlikely to change in the foreseeable future to benefit from the longer-term certainty that this product provides.

“It appears that the two and five year fixed rate markets are becoming saturated, meaning providers need to seek new avenues to attract new mortgage business. There are currently 17 providers competing in the 10-year fixed rate market, which is nearly double the number of mortgage providers that offered this term two years ago (nine providers).

“There are 158 products currently available in the 10 year fixed rate market, however, 108 products are only available to loan-to-values (LTVs) of 75% and below, while only two products are available at maximum 95% LTV.

“It appears that the 10 year fixed rate market may be geared towards the remortgage and second-time buyer market, as first-time buyers who step onto the housing ladder at 95% LTV are likely to want to remortgage down a LTV tier or two to get better rates as soon as they are able, and a 10-year stretch may well be far too long.

“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.”

Disclaimer

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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