West Bromwich Building Society has discounted two 10-year fixes by up to 0.20 percentage point as well as removing booking and completion fees on the products.
At 65 per cent loan to value, a decade-long fix is now available at 2.59 per cent from 2.79 per cent. Meanwhile, the equivalent product at up to 80 per cent LTV is priced at 2.89 per cent – a reduction of 0.10 percentage point on the lender’s previous offering.
The loans are available for new purchasers, home movers and remortgage customers at a maximum of 65 per cent LTV. All products in the 10-year range include a free valuation, while those borrowers who are remortgaging also qualify for fees-assisted legals.
The mortgages are portable, meaning borrowers can transfer their product if they wish to purchase a new property during the term without incurring early redemption charges.
The West Brom has also made revisions to some of its two-year fixes. Products up to 80 per cent LTV no longer have booking fees and selected rates have been lowered.
These include a two-year fix now at 1.74 per cent up to 65 per cent LTV and a new remortgage rate of 1.99 per cent up to 80 per cent LTV.
Provider view
David Taylor, the West Brom’s head of products, said: “We regularly review our mortgages to ensure they are meeting customers’ needs and remain competitively placed in the market. This isn’t just for our rates of interest; we also look at the incentives and fees that can help keep the total cost of borrowing down.”
Adviser view
James Carter, principal at London-based Independent James, said: “There has been a spike in the supply for these types of loans in recent history. We do not tend to look at 10-year deals because a lot of our customers are young and their circumstances are likely to change in the course of five years, let alone 10 years. These types of mortgages are likely to suit older and more settled individuals who are unlikely to move out of the property within the fixed period.
“These types of deals tend to be incredibly inflexible. I have had clients who wanted to leave their 10-year fix early because interest rates are much more competitive now than they were when they took out the fix.”
Charges
No booking or completion fees.
Verdict
The rate of interest applicable to 10-year fixes has fallen dramatically. Few would have predicted they would plummet to sub-3 per cent 10 years ago. Here, the products are competitive. The absence of a booking and completion fee is an additional bonus. The nature of these products protects the borrower from potential hikes in interest rate – which is particularly useful for individuals who believe such event would create difficulties in making their monthly mortgage payments.
However, a 10-year fix is still a difficult product to recommend because an awful lot can happen within that time frame. Young borrowers may change jobs multiple times, and singletons may meet their significant other in the course of a decade. In addition, the prospect of divorce might be seem unfathomable for many couples who take out a joint mortgage, but unfortunately these events happen. The prospect of facing an early repayment penalty is eye-watering – so too is the event of divorce itself.
