Borrowers looking to bag 10-year mortgages will be ‘disappointed’ as numbers fall
The number of 10-year fixed rate mortgages has fallen to 159 deals across the sector, with lenders pulling products in the past few days, analysis reveals.
Moneyfacts figures show that the number of 10-year fixed rates on the market has decreased from 169 on 16 May to around 159 currently.
It noted that Leeds Building Society, The Co-operative Bank and Platform had removed their 10-year fixed rate mortgage products in the past few days.
Since the start of the year, the number of 10-year fixed rates has been gradually increasing, going from 135 in January to 157 in February and then 165 in March and 168 in April.
However, the number of 10-year fixed rates is still above last year’s figure, which stood at 129.
The figures reveal that the average rate for a 10-year fixed rate has risen from 4.99% to 5.06% since the start of April.
Average pricing has been increasing over the last year from 3.21% in May.
Decade-long fix is a ‘committment’
Rachel Springall, finance expert at Moneyfacts, said that borrowers looking to secure a decade-long mortgage may be “disappointed to see a drop in product choice”.
“When lenders withdraw from such a niche sector, it can be in reaction to interest rate volatility, or even down to demand. However, this move may influence other lenders to follow suit and reconsider their own propositions,” she noted.
Springall said that those borrowers who want “peace of mind with their mortgage repayments” could be comparing five-year fixed rates and 10-year fixed rates amid “interest rate uncertainty”, but average interest rates are around 2% higher than they were a year ago.
“A decade-long fixed mortgage is a commitment, and consumers must be confident with the length of the term before they apply, as an early repayment charge would apply should they exit their mortgage early. Anyone considering a new mortgage would be wise to seek advice to go over the full package of any deal to find the right deal for them,” she explained.