Demand for ten-year fixed rate mortgage deals increases
IT’S difficult for many of us to imagine what we’ll be doing this time next year, let alone in 2028. But for an increasing number of forward-thinking borrowers, taking a ten-year fixed rate on their mortgage makes a lot of sense.
The thing is, many consumers don’t actually know that a decade-long fixed rate product is available.
In a recent survey, 60 per cent of homeowners weren’t aware that they could take out such a product, even though they have been well established in the market for quite some time. However, once they knew they were available, more than a third of those polled said that they would consider fixing their mortgage for ten years.
So why are ten year fixed-rate mortgages gaining in popularity all of a sudden?
Mainly because although the current interest rate is still historically low, due to forward governance from Bank of England Governor Mark Carney, we know that the aim is to increase them – once the economy can withstand such a move – to a more ‘normal’ level. For those who can remember life BCC (Before Credit Crunch) the average Bank of England Bank base rate between 1998 and 2008 was 5.5 per cent.
“For example, at the moment, the difference between a five-year fixed rate and a ten-year fixed rate can be less than a half per cent, which for customers who are comparing their options, does tend a make them a very appealing choice.”
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