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29th November 2019
Decade-long fixed mortgage rates fall to record low, says Moneyfacts
Market diversification of the 10-year fixed mortgage market has fuelled an increase in the number of deals available and, in turn, the resulting competition among providers has also pushed the average rate down to a record low. Seventeen providers are currently competing for mortgage business in the 10-year, fixed-rate market, four providers more than a year ago and eight providers more than two years ago.
According to the latest research by Moneyfacts.co.uk the number of 10-year, fixed-rate mortgages has reached 158 products and the average mortgage rate for a 10-year fixed mortgage currently stands at a record low of 2.76 per cent, a fall of 0.32 per cent year-on-year from the 3.08 per cent recorded in November 2018.
Darren Cook, Finance Expert at Moneyfacts, said: “During a period of economic uncertainty, borrowers may be considering alternative ways to shield themselves against interest rate fluctuations and assure some stability in household expenses for the longer-term. A 10-year, fixed-rate mortgage is a large commitment, so potential borrowers need to feel confident that their circumstances are unlikely to change in the foreseeable future to benefit from the longer-term certainty that this product provides.
“It appears that the two and five-year, fixed-rate markets are becoming saturated, meaning providers need to seek new avenues to attract new mortgage business. There are currently 17 providers competing in the 10-year, fixed-rate market, which is nearly double the number of mortgage providers that offered this term two years ago (nine providers).
“There are 158 products currently available in the 10-year, fixed-rate market. However, 108 products are only available to loan-to-values (LTVs) of 75 per cent and below, while only two products are available at maximum 95 per cent LTV.
“It appears that the 10-year fixed rate market may be geared towards the remortgage and second-time buyer market, as first-time buyers who step onto the housing ladder at 95 per cent LTV are likely to want to remortgage down a LTV tier or two to get better rates as soon as they are able, and a 10-year stretch may well be far too long.”