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Ten-year fixed-rate UK mortgages ‘are now incredible value’

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Locking into a 10-year fixed-rate mortgage used to come at a considerable cost but as interest rates on shorter-term home loans have edged up, the price of a decade’s worth of certainty has fallen.This week the best two-year fixed-rate mortgages had a rate of 2.54% for those borrowing 60% of the property’s value, while five-year deals were at 2.64% and the best 10-year rate was 2.73%.“The margins between two-, five- and 10-year fixes have fallen, so it has become a much more favourable environment for people to consider a long-term deal,” says David Hollingworth of the brokers L&C Mortgages. “They’re not having to pay as big a premium for it.”On a mortgage of £180,000 over 20 years the monthly price difference between the cheapest two-year deal and the cheapest 10-year deal is £16.78.

Over the first two years, that means paying a total of £403 more. But in year three, you could be better off. Hollingworth says he can see fixed rates “going through 3% sooner rather than later”.

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