Price wars between mortgage lenders, changes in inflation and predictions for rate rises have prompted many lenders to bring out some very appealing 10 year fixed rate mortgage products, the likes of which have not been seen before.

Mortgage lenders who may have upped their rates earlier in the year in anticipation of interest rate rises coming sooner rather than later are now offering some of the lowest fixed rate mortgages available as inflation has come down and the forecasted interest rate rises keep getting pushed further and further back.

With inflation falling to 1% in November 2014 to its lowest rate for 12 years (Office for National Statistics), speculation is growing that the first interest rate rise for more than 5 years may now not come in 2015, but in 2016.

10 year products have been released but it is likely better rates for 2 and 5 year fixed rates are on the cards too. Longer term fixed rate mortgages have become increasingly popular as the interest rate has remained stable, in fact unchanged at 0.5% for a long period of time, and rate rises are expected to happen slowly, meaning to appeal to the borrower the rates have been getting lower and fixed terms longer.

In November 2013 there were just twelve 10 year mortgage deals available, in December 2014 (16th) there are 52, that’s an increase of over 300%! Although variable rates have been stable fixed rates continue to be popular due to the certainty they bring.

Andrew Fagg Mortgage AdvisorOver the past few weeks, a host of providers, including some of the bigger lenders, have slashed their rates considerably and the reduction in mortgage interest rates shows no sign of slowing down. This trend has been intensified by recent falls in swap rates, the rate at which banks lend to each other. These are a key factor when lenders price fixed-rate deals.” Commented mortgage advisor Andrew Fagg

Andrew continues “The other motivation is year-end targets, as many lenders are behind where they want to be at this time of year, thanks to the delays caused by the Mortgage Market Review, the new regulatory regime, which came into force at the end of April which requires lenders to carry out more stringent tests to ensure applicants can afford mortgage repayments. Lenders are offering lower rates to drum up business to make up for these delays.”

Book an appointment with Mortgage advisor Andrew Fagg from Davenport Financial Management at one of our high street Mackenzie Smith offices to find out what mortgage would suit your needs best from a range of products in the mortgage market. Call 07720 353866 or email andrew@davenportfinancial.co.uk.

Rate of the week

  • 10 year fixed scheme until 2/4/2025
  • Initial rate 3.44%
  • Subsequent rate 4.74%
  • APR 3.90%
  • Up to 60% LTV

With changes to the stamp duty land tax, favourable mortgage products and the Starter Home Initiative, momentum is building for a very active property market in 2015.

Davenport Financial Management Limited is authorised and regulated by the Financial Conduct Authority. Davenport Financial Management Limited is registered in England No: 05608901. Registered office: Sherwood House, 41 Queens Road, Farnborough, GU14 6JP, Telephone 01483 427366. Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

Sources: http://www.thisismoney.co.uk/money/mortgageshome/article-2820925/Nationwide-launches-10-year-fixed-mortgage-record-low-3-49.html http://www.theguardian.com/money/2014/dec/16/lowest-ever-mortgage-deals-inflation-falls-interest-rate