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Long term fixed rate mortgages

In some European countries fixed rate mortgages lasting up to 30 years are on offer, Enables IFA’s in Bishops Stortford recently noticed one of the lowest 10 year fixed-rate mortgage on the UK market was offering 2.75pc for those with a 35pc deposit.

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On this deal a 25-year £260,000 repayment mortgage would cost £1,206 per month and a total of £144,682 over the fixed term. This particular mortgage allowed 10pc capital repayments each year with no penalty and the early repayment charges diminished the longer the mortgage was held. There are of course other 10-year fixed deals on the market with varying terms and conditions.

The main advantage of a 10-year fix is the certainty it provides, on top of taking away all the hassle and cost of feeling the need to re-mortgage every few years to keep up with changes and make the best deal. Some of these long-term fixed rates are suddenly cheaper because many believe in the reduced chance of an interest rate rises, at the moment it would seem as if the market believes the first UK Bank Rate increase might be several years away.

The dilemma is weighing up a long term deal with multiple shorter-term deals with lower rates when there are sub 1.5pc two year fixes on offer and sub 2pc three year fixes. Rates would have to go up substantially for the current 10-year fixed rates to be cheapest on average over the long term but the costs and hassle of re-mortgaging every year or so are not guaranteed as the long term prediction of interest rates. Enables IFA’s are happy to help you talk through the best decision for you.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Source: The Telegraph

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.

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