A 10 year fixed rate mortgage is a type of mortgage where your interest rate is fixed for 10 years. The advantage to this type of mortgage is that you’ll have budgeting certainty for a whole decade, as you know that your monthly payments won’t change throughout this period. This could be particularly attractive to someone who wants to be able to budget after the big expense of buying a home.
The stability of 10 year fixed mortgage rates can also work for those who simply like to have certainty in their budget.
The potential downside of this type of mortgage is that you’re locked into paying the same amount each month, regardless of changes in interest rates. So whilst you won’t have to pay more if interest rates go up, you also won’t benefit from a reduction in your monthly payments if interest rates do go down.
You should also bear in mind that most lenders require you to pay an Early Repayment Charge (ERC) if you want to leave a fixed rate deal early, the cost of which is usually fairly significant. If you’re considering a long-term deal, it’s important to think about any changes that could occur over the next decade. If you need more flexibility but still want some security of payment, you might want to consider a 5 year fixed rate mortgage instead.
10 year fixed rate mortgage process
If you decide you want the security of a decade-long deal, then the first step should be to do a 10 year fixed rate mortgage comparison. Whether you’re looking for a 10 year fixed rate interest only mortgage or a repayment mortgage, comparing deals will allow you to find the best lender for your personal circumstances.
Remember that you must be confident that your circumstances are unlikely to change before opting for this type of mortgage, as most lenders won’t allow you to leave your deal without paying an Early Repayment Charge. This can often be 3% of your total mortgage balance, or even higher in some cases. Whilst most mortgages are portable, meaning you can move them to another property, you need to meet the lender’s criteria at the time you’re moving so it’s not a guarantee you’ll be approved.
10 year fixed rate mortgage eligibility criteria
As with any other type of mortgage, the eligibility criteria for a 10-year deal will depend on many different factors, which can vary by lender. This applies whether you’re looking for an interest only 10 year fixed rate mortgage or a repayment mortgage.
Some of the criteria that lenders will consider include the amount you wish to borrow and how much deposit you have to put down, or how much equity you have if you’re remortgaging. Those looking to get onto the property ladder will have a better chance of getting a good 10 year fixed rate mortgage for first time buyers if they have a larger deposit saved up.
As well as your deposit and loan size, lenders will also look at your ability to make your payments every month. They will typically want to see at least three to six months of payslips, and bank statements to review your spending habits. They may also want to know about your future plans to assess whether your circumstances are likely to change.
Take a look at our mortgage finder to see what deals you may be eligible for.
10 year fixed rate mortgage repayments
Once your mortgage has been agreed, you’ll have the peace of mind that you simply need to meet the repayments every month for the next ten years. Most fixed rate mortgages are portable if you move home during the initial deal period, but you’ll need to meet your lender’s eligibility criteria at the time.
At the end of the ten years, you’ll usually be transferred to your lender’s standard mortgage rate, which is typically higher than the fixed rate you’ve been paying. If you wish to leave the mortgage early, you can typically expect to pay an Early Repayment Charge, which can be quite a significant cost.
Finding the best 10 year fixed rate mortgage deal
If you want peace of mind that your mortgage payments will remain the same for several years, a 10 year fixed rate mortgage could be the right option for you. Find out more about the benefits and drawbacks of fixed rate mortgages in our guide ‘What is a fixed rate mortgage and how do they work?’.
If you’ve decided that a 10 year fixed rate mortgage is right for you, L&C can help you to find the right deal to suit your personal circumstances. Once you’ve submitted your application online or over the phone, we’ll comb the market, searching thousands of mortgages across over 90 lenders to find you the best deal. You’ll be able to track your application online 24/7, and we’ll appoint you a dedicated case manager who’ll be happy to help with any questions.
