Early repayment catches have been cited as the only drawback to an emerging trend in cut-price, decade-long fixed-rate mortgages.
Coventry Building Society was the first to make an announcement with the lowest ever 10-year fixed rate at 2.39 per cent, for deals at 50 per cent loan-to-value (LTV).
HSBC launched a 2.79 per cent rate for purchases and remortgages for up to 70 per cent LTV, with no product fee, while West Bromwich Building Society’s 10-year deal was priced at 2.79 per cent for 65 per cent LTV.
Barclays also announced a 10-year fix at 60 per cent LTV, which is priced at 2.79 per cent with a £999 fee.
Up until this week, the lowest 10-year fixed-rate mortgage currently available was Leeds Building Society’s 2.84 per cent deal at 65 per cent LTV. This was launched back in March with a fee of £1,499.
A month before that, TSB offered a 10-year fix at 60 per cent LTV, which was priced slightly higher at 3.19 per cent, but with a fee of £265.
Nick Green, a broker at Alternative Estates & Financial Services, said while these low and long rates are great, the only problem is tying clients into a product for such a long duration.
Mr Green said: “Many moons ago there were rates that were fixed for 10 years with a five-year get out. I did loads of them, as rates came down below the fix, so we re-mortgaged once the early repayment period expired.
“No-one can see rates coming down that much more so the restriction is the main issue for me.”