Product launch of the week: Nationwide 10-year mortgage
Nationwide has launched a 10-year fixed rate mortgage at 3.49 per cent for buyers with 70 per cent loan-to-value. Existing customers can get the slightly lower rate of 3.39 per cent.
Richard Napier, Nationwide’s director of Mortgages and Savings, said: “This competitive mortgage range is likely to be particularly attractive to those looking for certainty around their monthly payments over a prolonged period, whether they are first time buyers or those who want to lock in payments against potential future rate increases.
“At Nationwide, we’ve seen significant amounts of customers favouring longer term fixed rate mortgages this year. In September almost a quarter of new reservations were for our five year fixed rate products. Clearly prudent customers want to protect themselves against payment increases and so the introduction of a new ten year fixed rate deal is a logical addition to provide for this trend.”
The mortgage is reasonably competitive. The other fixed rates on offer are from Woolwich, Barclays’ mortgage arm, at 3.49 per cent and West Bromwich Building Society from 3.99 per cent. The fee of £499 for first-time buyers and £999 for home-movers and remortgagers is reasonable. The group also has a number of fee free options, but interest rates are higher.
The early repayment charges are relatively high. Equally, there are some valid questions over whether a 10-year fix is necessary for anyone expect the extremely risk averse. Five year fixes at below 3% are now readily available. Interest rates are not expected to rise until the middle of 2015 and even then, are only predicted to do so relatively slowly.
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