Interest Rates Long Term

With Interest Rate hikes making the news at present is it time to fix your mortgage rate for the longer term?

The 10 year mortgage where you fix your mortgage rate for a whole decade is still quite rare but has started to become more of an option for clients when deciding to budget over the longer term.

Although these mortgages provide peace of mind of static payments over a longer term, the question is are they really worth considering. Only you know if you should fix for this length of term and therefore depends on personal circumstances. A lot can change over a 10-year period, so it is worth weighing up the advantages and disadvantages of such a longer fixed Rate Period.

Benefits of a 10-year fixed:

• You know how much you are paying each month so long time budgeting is easier
• Payments will stay the same even in interest rate hikes
• No need to shop around for a new mortgage deal every few years
• No fees associated with the re-mortgage process

Disadvantages of 10 year fixed:

• It is likely such rate will be a higher rate than shorter fixed term ones and therefore you will be paying more each month
• If Interest rates fall you wont benefit from lower rates Not as flexible should you decide to move house
• Should personal circumstances change, and you need to re mortgage then you may face an early repayment charge
• As you pay off your mortgage the Loan to Value will decrease and you may miss more competitive mortgage deals available

Will Interest Rates rise and by how much? If so, will payments be affordable. These are questions we can’t answer for certain so the option of a mortgage with a 10-year fixed rate may be attractive to some. For others there will always be the shorter 2year, 3 year and 5 year options.

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

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