10-year fixed rate mortgage

Our 10-year fixed-rate mortgage comparisons are provided by Koodoo[1]

Couple day dreaming about their future home

What's a 10 year fixed mortgage rate?

A 10-year fixed-rate mortgage will keep you locked in to the same interest rate on your mortgage for a decade.

10-year fixed-rate mortgages disappeared from the market after the credit crunch but made a comeback in 2014 and are still going strong.

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What are the benefits?

Staying on the same interest rate means you’ll know exactly what you’ll be paying out for the next ten years.

If interest rates were to rise, your repayments wouldn’t increase.

You also wouldn’t need to worry about remortgaging within the next couple of years or paying any of the fees that come with it.

A 10-year fixed-rate mortgage can provide security for you through times of financial instability too.

It'll give you the security of knowing you can afford your mortgage for the foreseeable future, because you're guaranteed to avoid any future rate rises during the 10-year term.

But if you're considering a long-term product, you'll need at least 40% deposit or equity to secure the best rates.

Realistically, you should only take this type of mortgage out on a house you see yourself living in for a while.

What are the downsides?

For starters, you’ll need a bigger deposit if you’re after a 10-year fixed rate – possibly as much as 50% of the value of your home.

If you can get a substantial deposit like this together, your interest rate will also most likely be low so you’ll be getting a better deal.

While interest rates may increase, they could also decrease and you won’t see the benefit of this as you’ll be stuck on the same fixed rate.

Generally, the longer the length of the fixed rate, the higher the interest rates and fees will be. This means your repayments may be more than someone on a two-year fixed-rate deal.

When your fixed term ends, you’ll be placed on a standard variable rate which can change at any time. If you want to stay on a fixed-interest rate for the next few years, you’ll have to remortgage.

Perhaps the biggest drawback with a 10-year fixed-rate mortgage is that you may have to pay fees to get out of your mortgage early. This will be an issue if you decide to move house.

What fees are there if I decide to move?

If your 10-year mortgage isn't portable, you won’t be able to transfer it to your new home.

Instead, you'll have to pay an early repayment charge. This could be between 1-7% of the remaining amount you owe on your 10-year fixed mortgage. You'll then take out a new mortgage on your next home.

Early repayment charges are often high within the first year, but will decrease over time.

Not all lenders will charge this, so check with your provider.

You’ll also have to pay admin and solicitor fees to exit your mortgage and enter a new one.

Fees you’ll have to pay include an arrangement fee to your new mortgage lender (anything between £0 and over £2, 000) as well as possible booking fees, valuation fees and exit fees.

You’ll  also have to budget for legal fees, surveys and your moving costs.

Finally, you'll need to budget for Stamp Duty if it's payable for the property you're buying.

Who is this mortgage best for?

A 10-year fixed-rate mortgage would suit someone who likes to know their monthly budget.

It’s also a good idea if you know you can’t afford any more than the amount you’ve set aside for your mortgage.

But it’s a long-term contract that you may not be able to exit easily - so best if you'e unlikely to move in the next decade.

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[1]For online mortgage comparison and advice Gocompare.com introduces customers to Koodoo which is the trading name of Mortgage Power Limited who are authorised and regulated by the Financial Conduct Authority (FRN 845978). Gocompare.com’s relationship with Koodoo is limited to that of a business partnership, no common ownership or control exists between us. Please note, we cannot be held responsible for the content of external websites and by using the links stated to access these separate websites you will be subject to the terms of use applying to those sites.