Five questions on: Nationwide's 10-year fixed-rate mortgage


Saturday 01 November 2014 01:00

What's the deal?

Nationwide is offering borrowers the chance to fix their mortgage payments for a decade.

Rates depend on how much of your property's value you're borrowing; new customers can fix their mortgage at 3.49 per cent up to 70 per cent loan-to-value while existing customers can do so at 3.39 per cent.

There's a £499 fee for first-time buyers and £999 fee for home-movers and remortgagers. Fee-free options are also available at higher rates.

However, borrowers who want to switch deals during the 10-year period will have to pay hefty early repayment charges to do so.

Who else offers 10-year fixed mortgages?

Woolwich, Barclays' mortgage arm, is offering 10-year fixes starting at 3.49 per cent and West Bromwich building society from 3.99 per cent.

How does the rate compare?

Borrowers opting for two or five-year fixed rates can get much-cheaper deals elsewhere. Several lenders are currently offering two-year fixes at under 2 per cent while Yorkshire, Norwich & Peterborough and West Bromwich building societies all have sub-3 per cent five-year fixes available.

Who are long-term fixed mortgages good for?

Long-term fixed rates are ideal for customers who want longer term certainty over the amount of their monthly payments and don't want the hassle of remortgaging. However, by opting for a 10-year deal you could miss out on cheaper mortgages that may come along.

Interest rates will rise soon, won't they?

The latest expert predictions don't expect the base rate to increase until at least after the general election in May.

Borrowers on variable-rate and tracker mortgages have saved thousands of pounds on payments during the past five years or so. Those who opted for fixed rates have generally lost out.

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