10 Year Fixed Rate Mortgages | Pros & Cons | Your Questions Answered!

Welcome back to the WIS channel and podcast!

I’m Gemma, and here we talk about money, mortgages, and positive money mindsets.

At WIS, we are a fee-free broker – we receive our fee from the lender, not from you. We began by helping WS Accountancy clients (mainly contractors and the self-employed) find mortgages. Over the past 10 years, we’ve expanded to help all kinds of borrowers: first-time buyers, contractors, expats, and more.

Today, we’re joined again by Ifthi, a trained accountant, mortgage advisor, and one of the founding directors of WIS.

Our topic: 10-year fixed-rate mortgages – their pros, cons, and place in today’s financial climate.

1. What Is a 10-Year Fixed-Rate Mortgage?

Gemma: Can you explain what a 10-year fixed-rate mortgage is?

Ifthi:

In the UK, there are two main types of mortgages: fixed and variable (the most common variable being a tracker mortgage).

A fixed-rate mortgage means your interest rate stays the same for a set “deal period.”

Example: You could take a 25-year mortgage but fix the interest rate for the first 2, 5, or 10 years.

Some lenders also offer 7-year or even 15-year fixed rates.

With a 10-year fixed rate, you know exactly what your monthly repayments will be for the first 10 years.

2. Why Are People Suddenly Interested in 10-Year Fixed Rates?

Ifthi:

Recently, the Bank of England increased the base rate several times in quick succession.

Rising interest rates, plus news of higher inflation, have made borrowers nervous.

Since higher inflation often leads the Bank of England to raise interest rates further, many borrowers want to “lock in” their repayments now with a 10-year deal.

This creates certainty at a time of economic uncertainty.

3. What Are the Disadvantages of a 10-Year Fixed-Rate Mortgage?

a) Early Repayment Charges (ERCs)

The biggest drawback.

An ERC is a penalty if you repay or change your mortgage before the fixed period ends.

On shorter deals (e.g., 2 years), ERCs are typically 2–3%.

On 10-year deals, ERCs are often 5% or more.

Example: On a £100,000 mortgage, that’s a £5,000 penalty.

Since no one can predict life 10 years ahead, this creates a real risk if you need to move or refinance.

b) Moving House and Porting Issues

Most lenders allow you to port (transfer) your mortgage to a new property.

Problems with porting:

• If you need a bigger loan, you’re forced to borrow the extra from the same lender at their rates.
• Deal lengths may not match (e.g., 10 years on one part, 7 years on another).
• You become “tied” to one bank.

c) Higher Overall Cost

10-year fixes usually have higher rates than short-term deals.

Example:

• 2-year fix at 2% vs 10-year fix at 3%.

You pay more interest on the 10-year deal, especially in the early years when most of your payments are interest.

With shorter deals, by the time you remortgage, your loan-to-value (LTV) may improve (through repayments + house price rises), unlocking cheaper rates.

d) You Lose Out if Rates Drop

If inflation is temporary (as some analysts predict) and rates fall, those in 10-year deals will be stuck paying more.

e) May Take Longer to Repay Mortgage

Paying a higher interest rate means less of your monthly payment goes toward the capital.

By contrast, choosing a cheaper short-term deal and overpaying the difference can reduce your balance faster.

f) Less Flexibility

ERCs limit your ability to switch lenders or make big financial changes.

Example: A client with a £500,000 mortgage faced a £25,000 penalty to move early – making moving unaffordable.

g) May Not Suit Borrowers With Smaller Deposits

Smaller deposits = higher rates.

Example: A 10% deposit borrower may pay significantly more on a 10-year deal.

In 2 years, that same borrower could have a 15% deposit (through repayments + rising property values), qualifying for a cheaper rate.

h) Limited Lender Availability

Not all banks offer 10-year deals.

These products are still niche and less popular because of their inflexibility.

4. What Are the Advantages of a 10-Year Fixed-Rate Mortgage?

a) Certainty for Budgeting

Great for borrowers who want predictable payments for 10 years.

Some clients prefer certainty over potential savings.

b) Good for Those Unlikely to Move

If you know you’ll stay in your home long-term, ERC risk is lower.

c) Works for Borrowers Happy to Port

If you’re comfortable staying with the same lender and porting when you move, this could work – but always seek advice first.

d) Better for Smaller Mortgages

ERCs on smaller balances are less painful (e.g., 5% of £50,000 = £2,500 vs £25,000 on a £500,000 loan).

e) Can Sometimes Increase Borrowing Power

Some lenders offer higher loan amounts on longer fixes, which may help certain borrowers.

f) Avoids Frequent Remortgaging

No need to deal with renewals every 2–5 years.

Ideal for people who dislike the admin or stress of remortgaging (though brokers like us make the process simple).

5. So, Who Should Consider a 10-Year Fixed Rate?

People who value certainty and budgeting over savings.

Those confident they won’t move in the next 10 years.

Borrowers with smaller loans (lower ERC impact).

Those happy to stay with one lender long-term.

Final Thoughts

Gemma:

10-year fixed rates have both advantages and disadvantages.

They’re not suitable for everyone – it depends on your circumstances, deposit, loan size, and attitude to risk.

Always seek professional advice before choosing a long-term deal.

Reminder: A mortgage is secured against your home or property. It may be repossessed if you do not keep up with repayments.