A fixed rate mortgage guarantees your interest rate for an agreed period of time, often two, five or ten years. A ten year fixed rate mortgage means that your interest rate and monthly repayments will stay the same for a decade.
On a typical 25-year term mortgage, you’ll pay the agreed rate for the first decade and then be moved onto your lender’s standard variable rate (SVR) unless you remortgage.
However, it is possible to get shorter-term mortgages, and if you choose one that only lasts 10 years, then the fixed rate will apply throughout.
Fixed rates are suitable for people who like certainty and are prepared to pay extra to know what they need to repay exactly. Longer fixes often mean higher interest rates, but you have more peace of mind.
Rates vary depending on who you borrow from, so it’s important to use an expert broker like Mojo Mortgages who can compare 10-year fixed-rate mortgage deals from across the market to find the right one for you.
Lenders set their own rates based on several external factors. These include what they think will happen to the Bank of England base rate, the price of UK gilts, the type of customers they want to attract and competition in the market.
You'll generally be able to access better rates if you have a larger deposit and can get a lower loan-to-value (LTV) mortgage as lenders will see you as less of a risk. Banks and building societies will also look at your credit history and spending habits your eligibility and what they can offer you.
Choosing whether or not to fix your mortgage rate is a personal decision that will depend on your risk appetite, personal circumstances and need for certainty.
Variable rates can be cheaper, but costs go up and down, so you need flexibility in your budget in case repayments rise. If your budget is tight, you could be at significant risk of not being able to pay what’s owed. In extreme circumstances, you could lose your home.
Fixed deals often have higher rates to begin with, but you know what you have to pay for the length of the deal.
Longer fixes offer more certainty than shorter deals, but you’ll lose out if rates fall. You could also save substantially if they continue to rise.
A 10 year fixed rate mortgage might appeal if you would like the security of knowing you could afford your mortgage for the next decade.
If you decide to apply for a 10 year fixed rate deal, the mortgage provider then looks at your finances to determine if you can afford it.
If you’re planning to move soon, make sure any fix allows you to port your mortgage (take it with you). Otherwise, you may have to pay significant repayment fees.
If you want to move house before your fixed-rate ends, you’ll need to see whether the provider will let you do something called “porting”. This is when you transfer the mortgage to your new home.
If you’re not allowed to do this but still need to move before your deal has ended, you will likely face early repayment charges (ERCs). It's important to be aware of how much these will be when taking out a mortgage, as they can amount to thousands of pounds.
Even if you can port, there are drawbacks. If you’re moving up the property ladder, you’ll have to borrow the extra cash from your existing lender – this might force you to take a less favourable deal.
There also often needs to be no gap between the sale of your old house and the completion on the new one. Some lenders will let you sell first and then reclaim the ERC if you buy within 90 days. This is a high-risk strategy because missing the deadline is costly.
Think carefully about your financial circumstances and whether they have changed. You need to prove you can still meet the lender’s criteria when you port, so you might struggle to get the deal if your income has fallen.
It's worth checking to see what deals are available on the market. If you can find a significantly lower interest rate, you might be able to save more than the repayment fee overall.
A mortgage broker can explain mortgage deals and the different fees involved to help you decide what the right option for you is.
Two-year fixed-rate mortgages is one of the shortest deal lengths usually available on the market. These tend to offer cheaper fixed rates than longer term deals.
However, if rates rise within the next couple of years, you may end up paying a higher rate when you come to remortgage.
They’re ideal if you want to fix but are planning to move in the near future, or if you think rates will drop, but don’t want to risk a variable rate mortgage.
If you want a bit more certainty than a two-year fix but aren't willing to commit to 10 years, a five-year fixed-rate mortgage might be more suitable for your needs.
These mortgages can sometime have higher rates than a shorter term deal, but may suit people who want to fixed costs over the medium term to help them budget accordingly.
If rates rise within the next five years, you'll benefit from fixed repayments. However, if rates fall then you won't be able to take advantage of this until your deal has ended (unless you pay ERCs to switch deals early).
While two, five and ten year fixed-rate mortgages are the most common deal lengths, you can sometimes get longer deals.
Certain lenders will fix rates for the length of the mortgage term, which could be up to 40 years. This gives you peace of mind that your rate won't change for the entire term of the mortgage.
However, these deals are rarer and you'll typically have to pay higher interest rates. Plus if interest rates fall, you won't benefit.
Two-year fixed-rate mortgages is one of the shortest deal lengths usually available on the market. These tend to offer cheaper fixed rates than longer term deals.
However, if rates rise within the next couple of years, you may end up paying a higher rate when you come to remortgage.
They’re ideal if you want to fix but are planning to move in the near future, or if you think rates will drop, but don’t want to risk a variable rate mortgage.
If you want a bit more certainty than a two-year fix but aren't willing to commit to 10 years, a five-year fixed-rate mortgage might be more suitable for your needs.
These mortgages can sometime have higher rates than a shorter term deal, but may suit people who want to fixed costs over the medium term to help them budget accordingly.
If rates rise within the next five years, you'll benefit from fixed repayments. However, if rates fall then you won't be able to take advantage of this until your deal has ended (unless you pay ERCs to switch deals early).
While two, five and ten year fixed-rate mortgages are the most common deal lengths, you can sometimes get longer deals.
Certain lenders will fix rates for the length of the mortgage term, which could be up to 40 years. This gives you peace of mind that your rate won't change for the entire term of the mortgage.
However, these deals are rarer and you'll typically have to pay higher interest rates. Plus if interest rates fall, you won't benefit.
You may be able to get a 10 year fixed rate mortgage with just a 5 or 10% deposit, but the more you're able to put down, generally the better deals you’ll have access to.
Some lenders may actually request that you have a deposit of at least 15% to 20%, while others want you to have 40% set aside.
Saving up for a deposit for longer can bring your interest payments down significantly, and since longer fixes typically charge more, this can tip the balance on whether a ten-year fix is a good idea.
This will depend on your risk appetite and how much you value certainty. A variable rate might be cheaper, but if interest rates go up, so will your repayments.
Fixed rates typically appear more expensive to begin with, but you know what you will owe for each month of the deal.
Many lenders offer shorter two-year and five-year fixed-rate mortgages. Speak to a mortgage broker who can look at the whole market to compare mortgages and find the right deal for you.
Once your mortgage deal has finished, your lender will move you to its standard variable rate (SVR).
This rate is often higher than other fixed or variable deals, so you should consider remortgaging as soon as possible. You can opt to switch to either a fixed or variable rate deal, and you can change your mortgage provider or stick with the same one (known as a product transfer).
Yes, but you will usually have to pay an ERC, which can cost thousands of pounds. Most lenders say you can overpay 10% of the outstanding debt each year, but rules vary.
It’s very difficulty to predict mortgage rates and what will happen in 2023.
The Bank of England base rate has risen several times in 2022 in order to try and curb rising inflation. The base rate directly affects most tracker mortgages, but it also influences the rates on other variable-rate mortgages and fixed-rate deals.
This means that mortgage rates have also increased throughout 2022. However, in November we have actually seen rates decrease for lots of mortgage deals (not including tracker rates), despite the base rate rising to 3%.
This is because, due to the economic uncertainty caused by the UK's mini-budget in September, gilt yields shot up which pushed up the costs of borrowing for banks. Lenders then priced a significant increase into their mortgage deals.
However, gilt yields have now decreased and the base rate is also not predicted to rise as much as previously expected, so many lenders are now reducing rates.
As lenders had already factored significant rate increases into their deals, while we might see the base rate continue to rise into 2023, we may actually see the rates on many fixed-rate and variable-rate deals decrease or remain steady.
Yes, there are a number of buy-to-let mortgage deals that allow you to fix your rate and monthly repayments for 10 years. These are usually also available for two and five years.
Yes, every application for credit you make appears on your record. If your application is rejected, this can also negatively impact your score..
Avoid making too many credit applications over a short period - if one lender says no, wait a few months before your next application.
Where you can, use soft searches to see what you might qualify for without impacting your score.
Use the links below to find out about other mortgages
