With borrowers worried about what might happen once the dust settles on the great Brexit debate, there has been a massive rise in the number of 10 year fixed mortgages available.
Five years ago there were just 16 possible options, but today’s house hunters have the choice of 158. The number of lenders offering deals has also risen from nine two years ago to 17 today.
Uncertainty about what will happen to the UK’s record low interest rates has made borrowers who want to be sure of their monthly repayments looking at the longer deals.
The average rate available on the deals has recently dropped to 2.76%, down from 4.61% in 2014. The averaged two year deal is currently 2.51% and the five year deal average is 2.92%.
The 10 year figure looks good, but Moneyfacts who compiled the analysis also had a warning to give about committing to a 10 year deal when circumstances might change. Hefty penalties might come into play if you have to quit the mortgage early.
Spokesman Darren Cook said 84% of the deals on offer included the option of moving home during the 10 years and resuming the deal on the same terms with the new property.
He added: “In times of uncertainty, a decade-long fixed mortgage could be a safe haven for borrowers looking to secure their payments over the longer term.
“But a 10 year fixed rate mortgage will need a lot of consideration, with borrowers looking at all the options.”
The majority of deals on offer are at 75% loan to value (LTV) with just two being offered at 95% LTV so the deals would appear to be aimed at the re-mortgage and second time buyer market.
But there is potential radical change on the horizon if the Conservatives win the election with American style 25 year loans on offer.
There have been no fixed deals longer than 15 years since the financial crisis, disappearing as lending regulations were tightened by the affordability clauses in the Mortgage Market Review (MMR).
Mortgage broker David Hollingworth said demand for longer term deals has been increasing amid worries about the economy and possible future interest rate rises from the historic low.