Why Choose a Long-Term Fixed Rate Mortgage?

One of the primary advantages of a long-term fixed rate is budgeting certainty

With your interest rate locked for 10+ years, you know exactly what your monthly mortgage payments will be during that time frame. 

This makes it much easier to plan your finances long-term without ANY surprises from rate hikes.

Rate security is another big draw. While no one can predict future interest rates with certainty, most economists expect them to rise from current lows over the next decade. 

Fixing for 10 or 15 years allows you to SKIP any rate increases and potential payment shocks during that period.

Additionally, long-term fixes can SAVE you money in the long run

With shorter fixes, you’d have to keep remortgaging every few years to avoid switching to the lender’s variable rate, which can be pricier. 

Each remortgage comes with fees, often over £1,000. A long-term fix means potentially just one remortgage, or even none at all, saving you a chunk of cash.

But it’s not just about the money. A long-term fixed rate mortgage brings peace of mind

You won’t be glued to the financial news, stressing about rate changes. Instead, YOU can relax, focus on life, and leave the mortgage juggling to someone else.

Image to show the benefits of long term fixes

The Potential Downsides of Long-Term Fixes

The big trade-off with longer fix periods is that the interest rate is typically HIGHER than a short-term fixed rate deal. 

Lenders charge a premium for the additional rate security. However, the gap between short and long-term pricing has narrowed in recent years.

Another thing to consider is that you miss out if interest rates drop overall. If that happens, you’re stuck with your current rate until the fixed term ends. (No sweet savings for you 😞).

Also, if you want to pay extra off your mortgage early, you might get hit with BIG early repayment charges (ERCs), especially with a long fix.

These typically apply if you pay more than a certain amount, like 10% of your balance in a year. So think carefully about whether you plan to smash through those payments early on.

Finally, if you think you might move and want to take your mortgage with you (called porting), it can be trickier and pricier with a long fix. 

Porting fees can sting a bit, and you get more flexibility with shorter fixed terms. So weigh up how long you plan to stay put before locking in for the long haul.

Downsides of Long Term Fixed Rate Mortgages

How Long Can You Fix Your Rate For?

Most UK lenders allow you to fix for a maximum of 10 years currently. Some may offer 15 or even 20-year options.

At present, the longest widely available fixed rate mortgage in the UK lets you secure your interest for 40 years until the very end of your mortgage term. However, this is incredibly rare.

Historically, most borrowers have chosen 2 or 3-year fixed rate periods. But with longer rates being more competitive these days, folks are increasingly going for 5 years or more.

The idea is to get some peace of mind knowing EXACTLY what your mortgage payments will be for a LONG time.

Is a Long-Term Fixed Rate Right for You?

Long-term fixed rate mortgages lock in your interest rate for over 10 years, which is a smart move for most homeowners planning to stay put. If rates are really low right now, you can snag cheap monthly payments for over a decade.

Hold on though, if you think you might move soon, these mortgages can sting with hefty exit fees. Also, if you’re sure rates will keep dropping, a shorter fixed term might be better to grab even lower rates later.

But for most folks who just want peace of mind and protection from future rate hikes, a long-term fix is a great option. It lets you relax and focus on life, knowing your mortgage payment won’t jump on you.

The  Bottom Line

Long story short, long-term fixed rates give you peace of mind – you know exactly what you’ll be paying for years to come, with no nasty rate surprises. 

Whether you fix for 10 years or even longer, you can budget for the future with certainty, knowing one of your biggest bills is locked in.

But, no matter what time frame you’ve fixed your mortgage, it’s smart to assess ALL your options. 😎

Different lenders have different rates and fees, so the flashiest deal might not actually be the cheapest in the long run.

This is where a whole-of-market mortgage broker can be your best mate. 

They see all the deals from all the lenders, so they can find the best fit for you, taking into account all the costs. They basically do the legwork so you don’t have to wade through a swamp of options.

Looking for the best broker? We can help you. Simply, get in touch, and we’ll pair you with a qualified mortgage advisor who can help you find and get the BEST mortgage deals.