Are you looking to purchase or remortgage a property, and want to consider a long-term fixed rate mortgage product?
For those who have purchased property in the last decade, many have never known the Bank of England base rate to be more 0.5%. The historically low rates have made mortgage borrowing very cheap for those purchasing or remortgaging property in the UK—but this trend is on the turn, according to suggestions from the Bank of England.
The base rate is predicted to rise on several occasions over the coming years, in order to counter inflation. Many of our clients are therefore understandably concerned about the cost of mortgage borrowing.
However, there is a way to mitigate the risk of rises over the next few years. By locking in a fixed rate mortgage product, borrowers can limit their exposure to future rate rises. The longest mortgage products can usually be fixed in for is a 5-year period, but some lenders have started offering products which go beyond this.
Our product of the week, for example, is a 10-year fixed rate at 2.69%, giving you complete security in what your payments will be for the next decade.
Whether you’re looking to purchase or remortgage, this product can be used to borrow up to £2million at 75% loan to value (LTV). 2.69% is by no means the cheapest rate currently available for residential mortgages—however, the Annual Percentage Rate of Charge (APRC), which can be used to compare the cost of mortgages, is actually lower than if you were to take out a 5-year fixed rate at 1.89%.
- 10-year fixed rate
- Mortgages up to £2million
We understand that many clients might be wary about committing to a fixed mortgage product for this length of time; a 5-year fix is a much more typical arrangement. This lender has accommodated for this, specifically clarifying that this product can be transferred onto a mortgage for a new home should you choose to move.
This product also offers another element of flexibility, as it includes an annual overpayment allowance of 10%. As the interest on this facility is accrued daily, so overpayments will reduce the level of interest you pay in total.