Two top new 10-year fixed rate mortgage deals launched by Nationwide and West Brom Building Society.
Two lenders have this week launched mortgage deals allowing you to fix your monthly repayments for a full decade.
West Bromwich Building Society was first, launching new 10-year fixed rate mortgage at 3.99%. The mortgage is available up to 75% loan-to-value with an accompanying £199 product fee. You’ll also be charged a £400 completion fee but if you’re a purchase borrower you qualify for a £500 cashback payment.
Nationwide responded with its own 10-year fixed rate at 3.49%. Existing customers can go even lower at 3.39% on the building society’s 0.1% loyalty discount. However, its limit is 70% loan-to-value. The product fee is £999 unless you’re a first-time buyer, who only pay £499. Fee-free options are available for higher interest rates.
How they compare
The choice is quite limited, but here are some of the other top 10-year fixed rate deals on the market:
|
Provider |
Term |
Initial rate |
Maximum loan-to-value |
Product fee |
Early Repayment Charges |
|
Barclays |
Until 31/12/2024 |
3.49% |
60% |
£999 |
Until 31/12/21: 6% of balance repaid Until 31/12/24: 3% of balance repaid |
|
Barclays |
Until 31/12/2024 |
3.99% |
75% |
£999 |
Until 31/12/21: 6% of balance repaid Until 31/12/24: 3% of balance repaid |
|
Until 30/11/2024 |
4.19% |
65% |
£199 |
Years one and two: 6% Years three to six: 5% Years seven and eight:4% Year nine: 3% Year 10: 2% |
|
|
Norwich and Peterborough Building Society |
10 years |
4.34% |
75% |
None |
Years one-three: 7% Year four: 6% Year five: 5% Year six: 4% Years seven and eight: 3% Year nine: 2% Year 10: 1% 7% in years one-three, 6% in year four, 5% in year five, 4% in year six, 3% in years seven and eight, 2% in year nine, 1% in year 10. |
|
Until 31/10/2024 |
4.34% |
75% |
£130 |
Until 31/10/17: 7% Until 31/10/24: 6%/5%/4%/3%/2%/1% |
|
|
Until 31/12/2024 |
4.49% |
80% |
£270 |
Until 31/12/19: 5% |
As you can see, the West Brom and Nationwide mortgages are some of the better options around if you want to go for a long-term fixed rate deal.
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The pros and cons of a 10-year fixed mortgage
Going for this type of mortgage is appealing because you can fix your repayments for such a long length of time. With Bank Base Rate only set to rise from here, you don't need to worry about what the Bank of England decides to do each month. Plus you don't have to worry about remortgaging every few years, so you save on product fees.
Knowing how much you’re going to repay for so long also helps with budgeting and financial planning.
However, if you want to switch to another provider or overpay on your mortgage, the early repayment charges (ERCs) are pretty severe. You’d need to shell out a hefty 7% of the amount you’ve already repaid if you came out of your Nationwide mortgage within the first four years of your term.
And be warned: you pay a serious premium for the sake of locking your repayments in for such a long period. For example, right now you can get a two-year fixed rate from Tesco Bank at just 1.79% with a 25% deposit. On a £150,000 mortgage over a 25-year term, that works out at monthly repayments of £625, compared to £799 with the West Brom.
Is it worth paying more to fix your mortgage rate for a decade? Let us know in the comments below.
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Clydesdale and Yorkshire banks offer to pay your mortgage for the month
HSBC launches 0.99% discounted variable mortgage
Fixed mortgage rates drop ahead of base rate change
Bank of England requests more powers to curb mortgage lending