Why opt for long term?
Following the release of these new mortgage deals, a report was published by HSBC suggesting more than seven in ten buyers would consider fixing their mortgage for ten years in order to give them more stability and certainty. This confirms that many households are seeking out long-term stability and financial security. Just be aware that these type of long term mortgage rate deals tend to come with higher deposits and larger product fees, unless you pay a slightly higher interest rate that comes with a lower deposit and lower fee.
The wider picture
Banks and building societies often cut their interest rates to attract more people to the housing market, which can then lead to other lenders reducing their interest rates, which explains how we come to have a mortgage price war on our hands.
Competitively low interest rates could well make property buying more attractive for prospective buyers, which could see the property market pick up, especially the buy-to-let market as investors won’t get much in return for their money by putting it into a savings account, whereas property could be a rewarding and worthwhile option.
If you’re looking to settle down and aren’t interested in moving on again anytime soon, you could take advantage of these longer-term deals, as coming out of them early does often come with a rather hefty early repayment charge, so you’d probably want to try and avoid that.
If you’re reading this and don’t feel that long term deals are for you, there are many other options so it’s worth speaking to a mortgage adviser to find out what options are available.