Seeking immunity from rate rises? Try long-term fixed-rate mortgages


The Bank of England is expected to put the base rate up at least once this year, bringing with it the possibility of higher interest rates for mortgage holders.

According to mortgage broker Private Finance, a 10-year fixed rate mortgage taken out in May would have cost just 1.04% more than a two-year fixed rate. With the difference between short fixed terms and longer terms being the smallest in a decade, borrowers are considering whether long-term certainty for a fraction more is worth it.

Traditionally, UK borrowers have opted for two or three-year terms, buoyed along by the changing market place and the need for flexibility to switch deals regularly and save money. However, in the current market place where further base rate rises are a possibility, many buyers are looking at longer-term options. While 10-year mortgages were a rarity between 2009 and 2014, according to there are now 114 products available.

Mainstream banks such as TSB and Barclays and building societies such as the Coventry and the Nationwide all offer decade-long fixed rates, as customers have wanted to take advantage of the low-rate environment and secure long-term certainty.

Virgin launches seven and 10-year fixed mortgages

Most recently, Virgin Money has launched a range of seven- and 10-year fixed rate residential mortgages in the past month, offering a seven-year fixed mortgage at 65% loan to value (LTV) at 2.37% and a 10-year fixed mortgage at 90% LTV at 3.25%, both with a £995 product fee.

Director of mortgages at Virgin Money, Andrew Assam, said: “We’re delighted to launch our new long-term fixed-rate mortgages. We have seen an increased appetite from customers wanting the opportunity to future-proof their mortgage repayments.

“With interest rates still relatively low, we’re offering homeowners the peace of mind of low mortgage payments for the next seven to 10 years.”

Lower rate two-year fixes could cost more over a decade

The rising costs of shorter-term deals mean that there is a narrowing price gap between 10- and two-year fixed rates, with the difference in monthly repayments cut by 27%. This could mean that over 10 years, choosing a lower two-year rate could cost borrowers more than the longer-term mortgage. Modest base rate rises coupled with remortgaging costs over the course of 10 years could easily absorb any savings made by opting for two-year lower rate fixes.

Shaun Church, director of Private Finance, said: “The UK mortgage market has tended to favour a short-term fix, but longer-term options are looking increasingly attractive in anticipation of the Bank of England following through with incremental rises to the base rate. Locking in for a decade can give borrowers immunity from further rate rises hitting their monthly repayments and allow them to benefit from today’s low pricing for up to a decade.”

For those that are considering selling, moving or remortgaging during the next decade, the early repayment fees might make a long-term rate less appealing, but for those staying put and wanting a long-term financial strategy, a 10-year fixed rate is the perfect product.

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


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.


Not a member? Sign up for free

Seeking immunity from rate rises? Try long-term fixed-rate mortgages


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.