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0 pointslmt553y ago0 comments

7 and 10 years are quite widely available now, although they're still not particularly popular.

Not sure why brokers didn't mention them to you. Perhaps they like to show people low headline rates, or perhaps they see longer initial terms as bad for the broking business?

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nsteel3y ago

I think it's both of those reasons. Collecting commission on one 10-year mortgage, or five 2-year mortgages... I doubt they get 5x for the longer term, if anything.

I'd like to understand how people think about a longer-term fixed deals. How do you know where you'll be in more than 5 years? If you need to move don't you get hammered by the ERCs? Can you really rely on transferring products?

Habito One is an interesting product, that seems to be a lifetime fix (Which I have personally never seen before the UK but maybe it exists) with no ERC! Obviously the rate is less attractive but rates are still so low and I think you can offset as well.

lmt55OP3y ago

You will get hammered by the ERCs, but with a few caveats:

  1. Often if you move house they will let you transfer your mortgage (actually take out a similar product and avoid the refi costs).
  2. If you win the lottery, or otherwise are in a situation to prepay your whole mortgage? Well you might care much less about the 5% early fees in that case.
  3. You can prepay usually 10% a year, at their discretion, without any early fees. If you just become a fair bit richer than you expected, prepaying at this level will reduce the mortgage quite quickly.

thrwyoilarticle3y ago

IME we had other confounding factors reducing the number of lenders available to us. It might be that they just didn't offer it.

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