Lender Launches Cheapest Ever 10-Year Fixed-Rate
2 minute read
In recent months, competition has grown for cheap 10-year fixed-rate mortgages. More accurately, in the past six months the amount of 10-year fixed-rate mortgages on offer has almost tripled. This growing trend has now seen the introduction of the cheapest ever such mortgage. High-street lenders Barclays are now offering a mortgage with an interest rate of 2.99%* which reflects the lowest ever rate on this type of mortgage. Comparatively, Santander and TSB are both offering 10-year fixed-rate mortgages with an interest rate of 3.44%*. The rate offered by Barclays does come with a deposit of 40%* and an application fee of £999*.
Are They Right For You?
Attractive interest rates will certainly draw customers attention and it is hard to argue with the favourable rates on offer. However, customers will need to pay thought to the long term implications of such an option and plan in line with these considerations. Whilst the security of such a deal is also extremely appealing, exiting such a deal will incur a large fee. To quote figures as an example, Barclay’s 10-year mortgage will cost customers 6%* of the sum repaid to leave the deal within the first seven years, or 3%* in the final three years of the deal. Equally Santander would charge 6%* of the outstanding balance if exited within any point of the 10 years. These figures do present very strong implications for customers who feel unable to commit themselves to a 10-year fixed-rate without any change.
The alternative to such a long commitment is a greatly reduced plan, at only half of the length of the 10-year deals. Five-year fixed rates are generally far easier to identify on the market, and Barclays again offer one of the best interest rates on such a deal at 2.39%. Each option should be considered carefully as they reflect an agreement that buyers will need to be able to commit to long term. To discuss your mortgage, get in contact with Just today. *All rates are accurate at the time of writing.