Borrowers looking at 10-year fixed mortgages despite rising rates

 

The latest research from moneyfacts.co.uk shows that the average interest rate on a 10-year fixed mortgage is on the rise. After hitting a record low of 2.96% at the start of February, the average 10-year fixed rate product has since crept back up to 3.05%.

It seems that, as predicted, lenders have begun to adjust their pricing due to funding changes and the speculation of increased interest rates by the Bank of England sooner rather than later.
[crb_image link=”https://www.buyassociation.co.uk/advice/property-investment-starter-course/” image=”https://cdn2.hubspot.net/hubfs/1717782/Asset_Store/WebCTA/cta.jpg” align=”left”]

However, despite the uncertain market, lenders are remaining competitive, offering a variety of deals to borrowers who might consider a 10-year fixed mortgage. Whilst the average rate stands at 3.05%, Barclays and TSB are offering rates as low as 2.39%, and Nationwide, HSBC and First Direct are all offering competitive deals under 3%, dependent on your circumstances.

Rachel Springall, finance expert at moneyfacts.co.uk, said: “In times of uncertainty, a decade-long fixed mortgage could be a safe-haven for borrowers looking to secure their mortgage payments over the longer-term. As consumers prepare themselves for a potential base rate rise this year, or possibly even multiple ones, their thoughts will be on how to safeguard themselves from an increase in interest rates.”

Long-term commitment

Decade-long mortgages may appeal to those that want longer-term stability and security, but borrowers should think carefully before making such a commitment. The early redemption charges on a 10-year fixed mortgage can be significant, so borrowers need to be pretty certain that their circumstances won’t change. If they did need to change their deal, they could be in for some hefty charges.

Borrowers may be more inclined to opt for a five-year fixed mortgage with cheaper rates and a shorter tie-in period. However, for some, the uncertainty of what interest rates will be like in 5 years’ time might be enough for them to commit to a decade-long fixed term. Whatever the decision, borrowers should remember to work out the true cost before making the commitment to any mortgage deal.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

future predict

Borrowers looking at 10-year fixed mortgages despite rising rates

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.