Top long-term fixed mortgage deals

Take a look at the best seven-year, and ten-year fixed mortgage deals available.

I want to write about long-term fixes today. They are a reasonable alternative to tracker or SVR mortgages. All my calculations are based on a £130,000, 25-year repayment mortgage. Tables are short as there aren't many of these mortgages to compare:

The top seven-year-fixed first-time-buyer mortgages

See the end of my article for all notes.

I put the monthly-repayment and true-cost columns in bold, because these are the most important. The interest rates and fees are hard to compare separately, so the bold columns make it easier for you.

The top seven-year-fixed remortgage deals

The best remortgage products on offer are the same as for first-time buyers, so see the above table. Some of them are a few hundred pounds cheaper for you, because a few of the fees are waived for remortgaging. Otherwise the results are the same.

Comparison with the top seven-year trackers

I don't have time to do a comprehensive and direct comparison of seven-year fixes with similar trackers, but I can give you rough figures from half-an-hour's work:

This table isn't small because I just used ½ -an-hour! That's long enough for me to be reasonably accurate with the figures, and I believe I haven't missed any important products. The thing is, there are no serious contenders in the 85% LTV bracket and First Direct's offer beats any existing 60% or 75% LTV mortgages.

This is actually a lifetime tracker, but there's no penalty to leave. Compare my first two tables: this tracker is seriously cheaper than the top fixed rates. But that's assuming that the Bank of England's base rate doesn't rise over the next seven years. That's very unlikely, in my view, and we may see an interest-rate explosion if inflation takes off when the economy recovers. The impact of an extra 5% on your tracker for a few years could add £400+ to your repayment figure.

The top ten-year-fixed first-time-buyer mortgages

 When you're looking beyond seven years, already a long period, you just don't know how your circumstances may change and cause problems. However, there are some historically low rates locked in for ten years or longer, which for some people could be good for budgeting and peace of mind. Here are the best ten-year fixes I can find in my thorough search:

The top ten-year-fixed remortgage deals

Again, the best ten-year fixes for remortgage customers are the same as for new ones, except for the best 85% LTV loan:

Note that this also beats the 80% LTV mortgage in the previous table.

Comparison with the top ten-year trackers

Again, rough figures for this, and First Direct's tracker appears to be unbeatable:

This is around £18,000 to £34,000 cheaper, depending on your LTV - IF interest rates don't rise, which they almost certainly will. Still, you could get a great head-start on rising interest rates by overpaying, as your monthly payments will be £140 to £270 lower.

Track or fix?

You can beat the prospect (but not certainty) of much higher interest rates by fixing or by overpaying your tracker mortgage while rates are low. If you get a tracker, be confident you could still pay the monthly bill in two to four years if interest rates rocket. If you're able to get the First Direct tracker, it's more valuable to you versus a fixed-rate the higher your LTV.

I suggest you read our latest tracker-mortgage article.

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Notes on the data in this article:

Data for this article was checked on 18 February, 2009.
All pound figures are rounded. Raw data is from lovemoney.com, Moneyfacts, Moneysupermarket, and the lenders' websites, but revised based on my own calculations. I've excluded products that are duplicated by others in the same banking group.
*Includes all fees and charges: arrangement fees, estimated valuation fees, transfer of funds fees, higher lending charges, redemption fees, extended early-repayment charges and an estimate for legal fees of £250, where appropriate.
**Available through intermediaries only. I couldn't confirm all the fees and charges, but it should be reasonably accurate. It's worth noting the early-repayment charge for this mortgage ends after five years, not seven.
***Available on 22/01/09, but I couldn't confirm if it's still available. Through intermediaries only. I didn't have complete access to the product details, so I may have missed some fees.

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