Why 10 Year Fixed Rate Mortgages Might Be Overkill
The political upheaval on both sides of the Atlantic last year saw many people fearing what 2017 would bring. So there is no real surprise that in January we found out that the market for 10-year fixed mortgage deals are flourishing.
According to moneyfacts.co.uk, we have gone from just eight deals available in 2014 to 124 to choose from now. This shows that consumers’ demand for long-term predictability in an ever-more uncertain world is being met by the market.
This marked an interesting return from 10-year deals, which used to be popular but fell out of favour, and, with fears rising that the days of super-low interest rates are coming to an end, there will be plenty of people hoping to lock into their current deal before it’s too late.
This is generally good practice, but I would not overly encourage anyone to sign up for such a long-term deal because an awful lot can change in people’s lives in 10 years and it could come back to haunt them.
People can out-grow their homes, they can get new jobs, lose their current one or get relocated, they will have children or get divorced or suffer a bereavement.
These are significant life-changes which cannot be predicted and can affect where we live, so if you are on a long-term deal and have to unexpectedly sell up and move, then you might face a hefty exit fee if the lender won’t let you port your mortgage to a new property.
There is some flexibility amongst lenders but very often what you’re given on the roundabouts they take away on the swings, so long-term deals should be treated with caution and, unless you are absolutely 100% certain you have no plans to move for a decade, my advice would be to steer clear.