Many freelancers might reject the idea of fixing their contractor mortgage for 10 years, but is that necessarily the right way to think?
We are constantly being warned by the new coalition that we are in for some painful years ahead. With a fixed rate mortgage, you know exactly what the repayments are, and this could be seen as an attractive option by some.
A new 10 year fixed rate mortgage came onto the market at the end of last week. Launched by the Yorkshire Building Society, it has a rate of 4.99% and is available to borrowers who can deposit at least 25% LTV. The set up fee for this deal is £995.
They also have another product, at a slightly higher fixed rate of 5.09%, which comes with £250 cashback and a free valuation for people moving home or free valuation and legal costs for people wanting to remortgage.
Both of these deals are fully portable offering flexibility to those who may move home within the 10 year fixed rate term.
Mortgage experts believe that longer term fixed rate mortgages do offer several advantages. As well as making budgeting easier, one of the greatest benefits is that you only need to pay one lending fee, whereas people who adopt a strategy of switching every 2 years will have to pay 5 fees in a decade. Those opting for the 10 year option could make savings of around £4,000 in fees.
Simon Gammon from Knight Frank Finance said that in the last few weeks he has seen an enormous amount of people opting for fixed rate mortgages. He pointed out that there are some great deals available on five year fixes including one from Britannia at 3.99%.
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Image: Piggy savings bank by alancleaver_2000
