So would you fix a mortgage for a decade?

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The Independent Online

With the UK housing market in thrall to the interest-rate decisions of the Bank of England, there is something to be said for borrowers seeking peace of mind on their mortgage payments.

With the UK housing market in thrall to the interest-rate decisions of the Bank of England, there is something to be said for borrowers seeking peace of mind on their mortgage payments.

A fixed-rate deal does the job neatly: you eliminate any risk of your repayments shooting up should base rates rise. Then again, you risk paying over the odds if rates fall.

Over one, two or three years, this might not be too expensive, but locking yourself into a fixed-rate deal for 10 years might prove a financial liability.

However, in launching a 10-year 5.19 per cent fix - the same rate as on its two-, three- and five-year fixed loans - Nationwide building society clearly believes that borrowers do want to plan for the long term.

The deal is available at this rate for customers seeking to borrow up to 90 per cent loan-to-value; it rises to 5.69 per cent up to 95 per cent LTV. It carries a £389 "reservation" fee and an extra £95 charge for people remortgaging (who can only get a maximum LTV of 90 per cent).

There is no higher lending charge (insurance that protects the bank or building society) and neither valuation nor legal fees for remortgagers.

Customers can also over- and underpay, and take the loan with them if they move to a new property.

Marsden building society also offers the same low 5.19 per cent rate on a 10-year deal, including free valuation and legal services for remortgagers, while Derbyshire building society has a 10-year fix at 5.3 per cent.

But brokers urge caution about handcuffing your money to a decade-long mortgage deal.

"You need to decide if you really do want a fix for that long as there will probably be plenty of rate moves that go down as well as up," says James Cotton at broker London & Country. "But for those few people who want security for such a period, the low rates available mean that now is a good time to do it."

Those looking for a fix, but not for quite so long, have lots of decent deals to choose from.

Five-year fixes include 4.98 per cent from Cheshire building society and 4.99 per cent from Alliance & Leicester.

For a two-year fix, Mr Cotton picks out a deal from Portman building society at 4.68 per cent.

"The rates on two-year fixed-rate deals have been falling for the past few months to below 4.5 per cent," he says. "But they're starting to creep up to around 4.8 per cent."

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