Cost of 10-year fixed mortgage goes up

The cost of long-term fixes has finally started to rise after falling considerably in the past three years, Moneyfacts data shows.

In January 2017 the average 10-year fixed rate stood at 3.20%, up from 3.11% in November 2016 but still far cheaper than the 3.63% recorded in January 2016 and the average of 4.17% in January 2015.

Moneyfacts finance expert Charlotte Nelson said: “This increase may be an indication of what is in store for long-term fixed rates in 2017.”

Long-term fixes are priced with one eye on whether the Bank of England base rate will rise.

Despite the minor increase the number of 10-year fixed rate products to choose from has skyrocketed from 80 in January last year to 124 this year.

Three years ago there were just eight products.

Nelson added: “Even with the slight increase in the average rate, borrowers could find that a 10-year fixed mortgage gives them the peace of mind that their repayment will not change, no matter what happens.

“However, while we know rates cannot stay at these lows forever, we do not know when they will rise, or by how much.

“Any borrowers considering this type of deal will need to puzzle through the maze and weigh up the odds to see if the gamble will eventually pay off.”

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Written by: Houseladder