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To fix or not to fix… is a ten year mortgage too long?

Mortgage rates are more competitive than ever before, and banks and building societies are offering historically low rates. Some of the most competitive deals are for ten year fixed rate mortgages. 

We talked to our home-buying expert Andrew Johnson to find out the pros and cons of a long term fix. 

Q – What are the advantages of a fixed term mortgage?

Andrew Johnson: Getting any kind of mortgage is likely to be one of the biggest financial decisions you’ll ever make, so it’s really important to make it based on your own individual circumstances. If you seek advice first, you’ll be able to understand the options that suit you best, not just now but also for future plans such as moving house. 

If you choose a fixed rate mortgage, you’ll know exactly how much your repayments will be each month. This gives you peace of mind that repayments won’t be out of reach should interest rates rise - especially if you have children or other dependents.

They also make budgeting much easier as you’ll know exactly how much you will spend every month. That will help you work out what money you have to spend elsewhere.

A ten year fix could be really useful if you need long term certainty on the repayments you make.


Q – Will any future rise in the Bank of England interest rate make a difference to how much people will pay?

AJ - No, fixing means you won’t have to pay more if rates go up. You’re locked into the rate and the mortgage provider can’t change it for the duration of the fix. That also means if rates don’t rise or get cut further you could end up paying more than if you’d been on a tracker (which follows the Bank of England base rate for an agreed period) or standard variable rate mortgage (which can change at any time).

Q – How else could a ten year fix affect what you pay?

AJ - The interest rate will generally be higher the longer you fix, though any fees you need to pay have less effect as they’re spread over a longer period.

With all fixes, you need to be wary of the headline rates. Look at the representative APR (annual percentage rate) instead because it takes into account the total cost of borrowing. That will help you compare it to other mortgages.

Q – What other risks are there with such a long fix?

AJ - If you want to move house, or need to remortgage, you may find your options limited. This is because if you want to get out of a fix early, you’ll often have to pay huge penalties, which are at their most severe in the early years.

My advice is to really check the small print and understand what your mortgage allows, and don’t forget to be clear about what happens at the end of the fix. 

What do you think? Does a long fix worry you, or does the stability help you? Let us know in the comments below…

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  • Bashir Shah / 17 September 2015

    If you know you won't be moving for ten years and are financially secure, it can be a great boost. I paid off my mortgage and worked out that it saved me thousands in interest. The amount you pay on a 25 year mortgage vs a, 10 year one is eye watering.

  • Mike Bird / 13 September 2015

    Irrespective:None of the above matters at all. When stripped of expertise, knowledge & experience, rejected by all subjective blind judgers in employment industry renders a person scum after 20 sound years of service rendered; rendering their life meaningless. One loss without reason leads to infinitely more forever. Lifeplan shattered. evil Ramifications immediately to all of society

  • Michaela wicks / 11 September 2015

    We have just fixed our mortgage for 10 years and the rate is only slightly higher than the tracker we have now. We used a professional we have used several times before to search the best deal and trust him totally as his advise has always been spot on for the past 7 mortgages he has arranged for myself and family members. The payments are very high but this is mainly due to our age and the fact we are only eligible for 17year mortgage. I believe you live within your means and although tough we will manage and know we will be mortgage free when we retire. We truly believe we have found our forever home so moving for us is not an option.

  • Wendi Ellis / 10 September 2015

    Ten years is too long. We took out a ten year fixed mortgage 8 years ago and have been paying 6.4%. Compared to the interest rates over those 8 years, we have paid dearly. The only upside to this is our mortgage was portable, which meant we could sell and move - in our case nearer to the coast, and without guaranteed jobs - with our mortgage in place, just a change of address and a small administration fee.

  • Lee / 6 September 2015

    "Horses for Courses" I think. I tecently took a 10 year fix at 2.98%. This means I'm currently paying 1% more than I was in my tracker but I'm fairly confident that over the 10 year period I'll be better off. My eldest is about to start secondary school with the other a year behind. We have no intention to move house until they've finished all their schooling so the 10 year fix should see us through most of that. I shortened the term of the mortgage when I remortgaged and rather than make overpayments I put any surplus into a ISA to give me the option of paying off a large chunk of the mortgage once the fix comes to an end or remortgaging again fepending on circumstances. Everyone's circumstances are different si should choose what is best for yhem at yhe time taking into account probable future events.

  • bp / 28 August 2015

    It's looking more likely that rates are going to start rising early 2016 so fixing now is probably a good idea. Using comparison websites is useful to see what is out there but beware of "lock in" penalties and also massive product fees which can add well over £1000 to your loan. Personally I want rates to rise as I will be mortgage free next week as I am transferring my balance to a 0% credit card.

  • AA / 26 August 2015

    My rate is a tracker at BOE base rate + 0.5% for life, no penalties and no tie in. Beats any mortgage currently on offer.

    Most people would be better off with short term two year mortgages (and low LTVs) to get the best rate. It is unlikely rates will rise dramatically in the near future. Who knows if the China crisis infects Western economies, rates may even fall (unlikely, but possible). It was only a stupid moronic Conservative chancellor who panicked and hiked interest rates to 15%. That is unlikely to happen again.

  • Scott / 12 August 2015

    Fixing your mortgage is a false economy of its several points higher on a tracker rate. Say interest on a fixed rate is 2% higher, then it would take 8 rate rises of 0.25% to wipe out that buffer zone. My tracker mortgage rate is 1.99%, no tie ins and no early repayment penalties. I'm trying to pay it off as soon as possible. Hopefully in 5 years, after 3 years in. That will be a huge saving on interest.

  • Sakan / 23 July 2015

    Standard variable rate is the best

  • james small / 15 July 2015

    No one is mentioning the LTV (loan to value) rate with a smaller mortgage compared to the value of the property you can get some really great deals. I have just taken a 2 year fixed rate with the ability of overpaying 10% each year with the intension of getting to below the 75% LTV so when I remortgage will look at reducing the term and keeping the same payments

  • Gill / 14 July 2015

    My 10 year fixed mortgage is coming to an end and I have been delighted with it. When we bought our house we were pushed to our borrowing limit, but as the house was exactly what we wanted we knew we would never want to move. However if the interest rates had risen, we would really have struggled to pay our mortgage. We wanted security to know that our monthly payments would never rise. Our deal is 4.99% which is the SVR at the moment anyway. We were also allowed to overpay by 10% each year, which in the beginning seemed unrealistic but something we have now been doing for years which has resulted in us halving our mortgage and we will now be able to pay it off years earlier than predicted. We won't fix again as we now wish to overpay as much as we can each month so that we can be mortgage free in a few years. It may not be the best option for everyone but for us it was definitely the right thing to do at the time we took the fixed rate deal offered to us.

  • Steve Cole / 9 July 2015

    I have 10yrs left on my mortgage, and with rates so low I think its a good idea to fix it, as rates will surely start to rise. Im also allowed to make overpayments up £100 per month which will reduce the debt quicker.

  • Penny Pincher / 21 June 2015

    On a 10 year fixed mortgage (150k) , if I pay off 20k lump sum what difference would it make to monthly payments and would the term reduce if I carried on paying off the same premium each month. ( just a thought)

  • Tony Wood / 18 June 2015

    People (especially article writers) keep referring to 'historically low rates'. That is not the case. When banks were flush before the global financial crisis, they were much more cavalier and speculative in outlook. In 2007 i took a 20 year mortgage fixed at 0.17% above base rate (at the time 0.5%) meaning essentially a 0.67% mortgage. There were no early repayment fees either. I have now paid off my mortgage but if i hadn't i would still be enjoying a rate unheard of in today's supposedly 'record lows'.

  • Paul Taylor / 13 June 2015

    I wouldn't commit more than 3 years and only then if you are confident that the economy isn't going to fall into recession and your salary increase will keep above inflation. I had to re mortgage when my fixed rate ended at the beginning of the recession and the best deal on the market was 6% over 5 years. For the first year the standard variable rate was above 6% but by 2 years had dropped to 2% and became lower over the remaining period of my fixed rate. When the 5 year fixed term ended my mortgage reverted to the standard variable rate of 0.5% and so my payments dropped by £650 a month.So by trying to play safe with a fixed term I had been over paying an excessive amount. The bank of England is committed to keeping the interest rate low so I wouldn't pay a higher fixed rate and if the interest rates were likely to rise the financial institutions would know long before the public and adjust their lending rates accordingly so they don't lose income should the interest rate rise. You are better off staying with the Standard Variable Rate and save 1% of your mortgage repayments in a separate saving account .

  • Rob Roberts / 11 June 2015

    We built our own house in the 1980s. We did our sums and were both on good salaries .bearing in mind that interest rates were at rip off levels up to 15% at times we opted for a 10 year mortgage. With paying off capital when we had spare cash and a good endowment policy we paid the loan off in 7 years. My advice to anyone is pay it off as quick as possible. Banks and building societies are not there to help you.

  • BarmyArmy / 1 June 2015

    It is clear that lenders will try anything to get us committed to borrowing. They aren't so quick to help when you get into financial difficulties.
    These establishments will write to you to tell you that you are defaulting or in arrears and charge you for the privilege. Not only this they will keep writing to you and keep charging you, thus plunging you into further financial crisis.
    if people want to borrow may I suggest you seek legal advice before signing any contract with any financial institute. if a lender tells you the offer is only valid for that day then walk away.

  • Clive weir / 31 May 2015

    Two issues, the first is that the money markets/banks don't expect to lose out on these deals so if they offer a rate at x% they don't expect it to average higher. The main issue is that 10 year fixed will generally have a 10 year tie in, that is a massive commitment, people can move, split up, etc etc and if you then don't fit that lenders criteria or need to sell it would prove costly.

  • Kym / 29 May 2015

    i entered into a 5 year fixed rate, I would of gone for 10y but didnt have enough deposit. I agree taht going for 2yr would be less monthly but you have to also take into consideration that once you remortgage you have to go through the application again and if you're lucky to find without fees or low fees. take also solicitor fees again it all adds up so if you had 2yr x 5 times of fees would you really be saving than by going with a 10yr? As you never know what banks will do when it comes to fees, hiking them up to claw back.

  • Dr Alice Neal / 26 May 2015

    Its just like gambling and the betting house (the bank) plans to win at all times. A 10 year fix at
    e.g 4% indicates that the offering bank experts predict interest rates will stay below the rate offered for the duration.
    If nothing else, 10 years fixes give a good indication of where the banks think interest rates will be over the periods they offer mortgages for. The only benefit is predictability, but they will;l cost you more than if you don't fix.

  • partridge / 24 May 2015

    grab it while you can

  • H S Manchanda / 22 May 2015

    Ten years is a very long period to committ. Things are changing very fast and anything could happen. At one stage I got fed up with interest rates going up and down. I made up my mind to fix this for 5 years and went to building society. As I was handing over my papers I just asked the girl if I was doing right and asked about her opinion. I was told even 5 years committ men was bit much. I brought my papers home. It just happened the interest rates were going don and have saved m nearly 300pounds every month lot of research has to be done before one commits

  • Harpreet Kapoor / 16 May 2015

    Well, after much consideration I have discarded an idea of getting into long term deals. Short term fix not only gives you best rates these days but also provide a possibility of selling/letting your property once the period expires.
    Even though the mortgage period is for 25 years you still can make overpayments and reduce the period. As people not only think of their house as a home but it is an investment too.
    I have another property which I will by my retirement, so pension's sorted!

  • Alistair / 6 May 2015

    I took out a £120k remortgage on a 10 year fix at 5.09% six years ago, convinced at the time that the historically low interest rates were bound to rise in time. Also cost £699 and had a 5% leaving penalty for first 5 years, reducing to 4, 3, 2, 1% annually after. What a bad move - rates have actually decreased so much and it's cost a fortune. Luckily I have just retired and will be able to pay it off using part of my lump sum, including the now 4% penalty. The bank's adviser also said it was a good deal and made sense at the time - not his fault as no one then would have predicted the way interest rates have gone. Given what I've paid in 'extra' interest over the years compared with their better offers, the penalty for early redemption does however seem a bit unfair.

  • Paul Bones / 5 May 2015

    10 yrs costs you more short term - but could save quite a lot over time. Interest payable over
    say, twenty years, adds up to a lot. Big savings eebe from paying over a lesser period - if you
    can afford it short term.

  • Brian Melling / 19 April 2015

    A good adviser who looks at a wide range of deals instead of one bank, can tell you all the good and bad bits if fixing for 10 years, based on your personal situation and not a generalisation. Not all lenders have penalties for the full 10 years and if you do move you can usually take the mortgage to the new house, known as porting.

  • Daniel barker / 6 April 2015

    Very little advice or information here, what a disappointment but I never expect any real advice from these sort of institutions I suppose.

  • Daniel barker / 6 April 2015

    Very little advice or information here, what a disappointment but I never expect any real advice from these sort of institutions I suppose.

  • Rick Ryder / 22 March 2015

    Some fixed mortgages still allow a small over payment, by doing that you dramaticaly reduce your total payments. Our mortgage with santander of 10 years is fixed for the first 5, with 10% overpayments we intend to clear our debt in 6 years Without penalty.

  • Chris Madden / 17 March 2015

    Not necessarily true. I'm a portfolio landlord and have some so called tracker mortgages fixed at 0.5% above base. The lender, West Bromich, has found a clause in the fine print to increase it by 2% and for now, they've got away with it. Don't think for one second that other lenders aren't watching very carefully to see if they can do the same on ordinary domestic mortgages.

  • Raymond Khadoo / 16 March 2015

    I am paying the last two years of my mortgage which is within a fixed five years term, I could possibly pay it out now but I do not want to pay the penalty charge. Just a thought.

  • rob / 13 March 2015

    In my final year fixed for 10 years.. advantage being i can make any ammount over payment when go to Base Rate.. It's nice to know your fixed for a period and secure knowing interest rates could go up.. when i took mine out i too thought Rates would go up, they did actually go down as fixed deals had slightly better offers, however also you have to take into account that fixing for 10 years comes at a cost.. think mine was £600 but fixing cost's have also gone up since then.. I would fix again i think now that the rates will go up more in next 10 years. would suggest repayment morgage if you can & not Interest Only..

  • Ljones / 8 March 2015

    For anyone who recalls 15%, my mortgage was going up by hundreds, a fix is good but not ten years life's too fluid!

  • Sarah Scott / 1 March 2015

    Ten years is fine providing you don't have a change in circumstances and have to sell your house . I was half way through my fixed rate mortgage and due to a marriage breakdown had to sell . The redemption penalty was horrendous and ate up half the profit .

  • Fabrice Occhini / 27 February 2015

    I'm about to enter a 10 year fixed mortgage with Nationwide. I can't help but believe interest rates will go up to at least 5% over the next 10 years but even if they don't my rate is low enough that I won't lose out much. I will also know exactly what I need to pay each month and at the end my mortgage will be completely paid off which was the other incentive.

  • Kelvin / 25 February 2015

    10 yr fixed rate. The best thing in the world right now. Interest rate are so low. It will only go up soon. Much higher soon I predict. So get a 10 yr rate today. And save several thousands £££££ in the long run.

  • Phil / 20 February 2015

    APR clouds things as it considers the standard variable rate (SVR) once your fix ends. If rates rise, so will the SVR and thus the APR; the fixed rate is the only constant and you can of course (and should) remortgage at the end of the fixed term which makes the APR irrelevant. I grant that this doesn't take into account the fee but it's not difficult to fit this into the equation given you're looking at 10 years.

  • Happy lady / 14 February 2015

    My 10 year fixed rate ends next year. It has been a godsend. During that time I have had a relationship breakdown, some financial issues which would have affected credit, now resolved. I am aware that I could've saved thousands due to low interest rates of late but I believe it has balanced out as rates have been higher and I haven't had to pay remortgage fees, applications etc. would definitely have fixed rate again. One set payment suits me.

  • Shaun Hunneybell / 13 February 2015

    Just coming to the end of a ten year fixed rate mortgage, brought on by a poor endowment. Best thing I ever did. Would have lost the house otherwise.

  • Mick / 12 February 2015

    I am a first time buyer and am finding all the different offers and rates fixed or not, a complete puzzle. Banks have become professional con artists like solicitors with all their ad-on fees such as ETF. Nothing is clear except the fact that there will be a nasty surprises along the journey if you don't do lots of home work first.

  • John Ross / 10 February 2015

    With interest rates being at an all time low, this makes fix rates less attractive. I've lost thousands because I took out a fixed rate nearly 10 years ago.

    Of course I write this with the benefit of hind sight.