Coventry Building Society has released a 10-year fixed-rate mortgage deal, which is nothing new. However, they’re offering this at 2.39% – this means it’s cheaper than most five year deals, and makes it a seriously tempting offer that could work very well for some. That said, there are a lot of things to consider in order to decide whether or not this is right for you.
You first need to make sure that you are borrowing 50% or less of your home’s value – any higher than 50% and you won’t qualify. There is also a fee of £999, so be prepared for this.
Make sure you’re staying put when taking out this mortgage – one of the main conditions of this mortgage is that if you move within the next 10 years you will have to pay a penalty to leave your home. This can be up to 5% of the value left outstanding on your mortgage. This fee drops to 3% after 2 years, and down to 1% after 5 years.
Like many things in the industry at the moment, we have Brexit to thank for this mortgage. To put it simply, thanks to Brexit pushing down long-term city swap rates even further than they were, fees have been pushed down to an all-time low. This does mean that you can get a guaranteed low rate for the next 10 years.
Rates could drop further following the meeting of the Bank of England on the 14th of July due to Mark Carney wishing to ‘ease monetary policy’ – bear in mind this could also mean he wishes to go down the route of ‘quantitative easing’ or slashing interest rates.
In summary, mortgages are currently very very cheap. By going for a long term fixed mortgage, you’re not only saving yourself thousands of pounds, you’re also getting piece of mind and eliminating uncertainty about the future. Admittedly, prices could possibly get cheaper, but there’s no guarantee that the market will stay that way.
If you require more advice about mortgages, including whether or not this fixed rate is the right option for you, get in touch with our specialist team of mortgage advisors to have a look at your current deal and decide if mortgaging is the right option for you.