Despite the Bank of England raising interest rates to 0.50% in February, long term fixed rate deals are currently at their lowest ever level.
Recent weeks have seen shorter term fixed rates tick up following the Bank’s December decision to hike rates, but many lenders, including TSB, Virgin Money, Lloyds and Halifax improved their 10-year fixed rate mortgage offers ahead of the latest rate rise.
Soaring living costs combined with rate rises could boost the appeal of locking into a fixed rate for 10 years, especially now that the margin between these and five-year fixes has narrowed. Ofgem announced earlier this month that the energy price cap will rise by 54% in April, placing even greater financial pressure on many households and prompting many to look at ways to reduce their outgoings.
Locking into a 10-year fix could provide valuable long-term security, especially with interest rates expected to rise further in coming months, but it’s vital to carefully weigh up all the pros and cons of these longer term deals first.
Long-term fixes buck trend of rising rates