Spotlight On: Chelsea's 10-year fixed-rate mortgage

The deal

Chelsea – part of Yorkshire Building Society – is offering a 10-year fixed-rate mortgage at 3.99 per cent.

The good points

If you think rates will rise in the next decade, fixing at less than 4 per cent now could be a wise choice.

The bad points

You'll need at least a 30 per cent deposit to qualify for the deal. The arrangement fee is expensive at £1,495. However, if you take a higher rate – 4.19 per cent – the arrangement fee falls to £195.

Conclusion

More lenders are offering longer-term fixed rates. Last week it was the Skipton with a fee-free 5.85 per cent deal that required a deposit of just 15 per cent. The attraction of long-term fixes is the security of knowing how much monthly mortgage payments are going to be. But if rates remain low, tying yourself into a 10-year deal could mean paying well over the odds for your loan. Also if you want to escape the deal, early repayment charges can be onerous. However, at 3.99 per cent, Chelsea's offer looks tempting.