The cheapest 10 year fixed rate mortgages

0
0
0
0

The cost of 10 year fixed rate mortgages has come down. You can now get a 10 year fixed rate mortgage for less than 2.5%. But who offers the cheapest deals and should you fix your mortgage rate for ten years?

The cheapest 10 year fixed rate mortgages

I asked London and Country mortgage brokers to compile a table of the cheapest ten-year fixed rate mortgages. They’ve named the cheapest lender for different loan-to-value (LTV) limits, from 65% to 95%. The Coventry Building Society has cut the interest rate on its ten-year fixed rate mortgages, and so appears at the top of the table for a number of LTV limits. The early repayment charges may put you off, but from the deals London and Country have selected, these do vary quite substantially. In  one case there’s no early repayment charge at all after five years.

Cheapest 65% loan-to-value 10 year fix

The cheapest deal is from the Coventry Building Society, which has a ten year fixed rate mortgage charging 2.49%.

How long is it fixed for: Until 30.09.2028

Maximum LTV: 65%

Interest rate once the deal runs out: It’s Coventry’s Privilege rate, which is currently 4.49%.

What are the fees: An arrangement fee of £999.

What are the early repayment charges (ERC) and how long do they last for: 5% of the balance repaid until 2020, then 3% until 2023. No penalty after 2023.

How much can you overpay? You can overpay 10% a year without having to pay a penalty.

Free valuation or legal work? Free valuation and free basic legal work for a remortgage.

There’s also an HSBC mortgage, which charges the same interest rate but there’s no fee for this deal. However you can only borrow up to 60% of the property’s value.

HSBC’s ten-year fixed rate mortgage charges 2.49%.

How long is it fixed for: Until 30.11.2028

Maximum LTV: 60%

Interest rate once the deal runs out: It’s HSBC’s standard variable rate, which is currently 3.94%.

What are the fees: There’s no fee.

What are the early repayment charges (ERC) and how long do they last for: 1% of the balance repaid (minus the overpayment allowance) until 30.11.28.

How much can you overpay? You can overpay 10% a year without having to pay a penalty.

Free valuation or legal work? Free valuation and free basic legal work for a remortgage.

75% loan-to-value 10 year fix

Once again, the cheapest deal is from the Coventry Building Society, which has a ten year fixed rate mortgage charging 2.55%.

How long is it fixed for: Until 30.09.2028

Maximum LTV: 75%

Interest rate once the deal runs out: It’s Coventry’s Privilege rate, which is currently 4.49%.

What are the fees: An arrangement fee of £999.

What are the early repayment charges (ERC) and how long do they last for: 5% of the balance until 2020, then 3% until 2023, then 1% until 30.09.2028.

How much can you overpay? You can overpay 10% a year without having to pay a penalty.

Free valuation or legal work? Free valuation and free basic legal work for a remortgage.

85% loan-to-value 10 year fix

The cheapest deal is from the Coventry Building Society, although Virgin Money has a competitive fee-free deal as well.

Coventry Building Society’s ten-year fixed rate mortgage charges 2.69%.

How long is it fixed for: Until 30.09.2028

Maximum LTV: 85%

Interest rate once the deal runs out: It’s Coventry’s Privilege rate, which is currently 4.49%.

What are the fees: An arrangement fee of £999.

What are the early repayment charges (ERC) and how long do they last for: 5% of the balance until 2020, then 3% until 2023, then 1% until 30.09.2028.

How much can you overpay? You can overpay 10% a year without having to pay a penalty.

Free valuation or legal work? Free valuation and free basic legal work for a remortgage.

Virgin Money’s ten-year fixed rate mortgage charges 2.99% but charges no fee.

How long is it fixed for: Until 01.11.2028

Maximum LTV: 85%

Interest rate once the deal runs out: It’s Virgin Money’s standard variable rate, which is currently 4.79%. Once you’ve been a Virgin Money mortgage customer for seven years, you get 0.25% off the standard variable rate.

What are the fees: No fee.

What are the early repayment charges (ERC) and how long do they last for: 7% of the outstanding balance until 01.11.2022, then 6% until 01.11.2023, going down to 1% until 01.11.2028.

How much can you overpay? You can overpay 10% a year without having to pay a penalty. You can also apply for a one month payment holiday for every nine months of full payments you make (although you’ll still be charged interest during this period).

Free valuation or legal work? Free valuation and free basic legal work for a remortgage.

90% loan-to-value 10 year fix

Once again Coventry Building Society is the cheapest, with its ten-year mortgage charging 3.15%.

How long is it fixed for: Until 30.09.2028

Maximum LTV: 90%

Interest rate once the deal runs out: It’s Coventry’s Privilege rate, which is currently 4.49%.

What are the fees: An arrangement fee of £999.

What are the early repayment charges (ERC) and how long do they last for: 5% of the balance repaid until 2020, then 3% until 2023, then 1% until 30.09.2028.

How much can you overpay? You can overpay 10% a year without having to pay a penalty.

Free valuation or legal work? Free valuation and free basic legal work for a remortgage.

95% loan-to-value 10 year fix

There’s not much demand for 95% LTV mortgages that are fixed for ten years. That’s because it tends to be first time buyers who need to borrow 95% of their property’s value, and they are more likely to move within ten years. However, some first time buyers, or someone who’s trading up and who is borrowing 95% of their property’s value may be tempted by a ten-year fix. Virgin Money’s ten-year fixed rate mortgage charges 4.99% but has no fee.

How long is it fixed for: Until 01.11.2028

Maximum LTV: 95%

Interest rate once the deal runs out: It’s Virgin Money’s standard variable rate, which is currently 4.79%. Once you’ve been a Virgin Money mortgage customer for seven years, you get 0.25% off the standard variable rate.

What are the fees: No fee.

What are the early repayment charges (ERC) and how long do they last for: 7% of the outstanding balance until 01.11.2022, then 6% until 01.11.2023, going down to 1% until 01.11.2028.

How much can you overpay? You can overpay 10% a year without having to pay a penalty. You can also apply for a one month payment holiday for every nine months of full payments you make (although you’ll still be charged interest during this period).

Free valuation or legal work? Free valuation and free basic legal work for a remortgage and £300 cashback for purchases.

Should you fix your mortgage for ten years?

Fixing your mortgage rate for ten years isn’t right for everyone, but David Hollingworth, of London and Country mortgage brokers, says it could be cost effective over the long term . “Depending on how interest rates shift over time, a ten-year fix could work out to be the cheapest option, despite the mortgage rates being higher than some of the shorter term two to five year deals.” However, he says that the early repayment penalties will put some people off considering them. “Although the vast majority of deals can be taken to a new property it will still be subject to criteria at that time.  There is no guarantee what the lender would offer on any additional top-up borrowing or even if it will agree to the existing mortgage moving across.”

If you can’t take your mortgage to the new property, you’d have to pay the early repayment charges and take out a new mortgage. If you had a £200,000 mortgage and you needed to repay the loan after five years, you would owe between £170,000 and £180,000, depending on the interest rate you were on. So, you might have to pay between £0 and around £10,000 in early repayment charges if you had to pay off the loan early, depending on the deal.

Useful links:

You can find all the details of Coventry Building Society’s fixed rate mortgages on its website

You can find out about HSBC’s mortgage rates on its website.

There’s information on all Virgin Money’s mortgages on its website.

You can find out more about London and Country in SavvyWoman’s directory

Related articles:

How to get the mortgage you want at the best rates; tips on how to get a mortgage

Digital mortgage brokers – getting a mortgage online

How to find a good mortgage broker

SavvyWoman email newsletters: If you found this information useful why not sign up now to receive free fortnightly email newsletters with money saving tips and help? You can sign up at the top of any page on the website and your details won’t be passed to any other company for marketing purposes.