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There’s now a mortgage rate below 4% – but is it worth fixing for 10 years to get it?

At the start of the year, a popular topic of discussion among property experts was whether rates on fixed mortgages would fall back below 4 per cent. 

They didn’t have to wait long, as within the first five weeks Virgin Money released one at 3.99 per cent – although anyone taking it out will need to fix for a decade. 

The rapid rise of interest rates following the Autumn mini-Budget saw the average for both two and five-year fixed rates soar to over 6.5 per cent in October. 

However, rates have been steadily falling since then despite successive base rate increases from the Bank of England

Decade-long mortgages may offer benefits to those who have found their 'forever home'

Decade-long mortgages may offer benefits to those who have found their ‘forever home’

There is yet to have been a two or five-year fixed mortgage with a sub-4 per cent rate this year. In February, the average two-year fixed mortgage rate was 5.44 per cent with the five-year fix at 5.2 per cent, according to Moneyfacts. 

But looking at the cheapest rates on the market, some lenders are beginning to come close to breaking the 4 per cent barrier. 

Lender Platform currently offers a five-year fixed deal at 4.16 per cent for those with a 40 per cent deposit, while Newcastle Building Society has a two-year fix at 4.35 per cent. 

And the next best ten-year fix after Virgin is Halifax, offering 4.04 per cent.

While brokers expect mortgage rates to continue falling despite the Bank of England signaling the base rate has not yet peaked, there is a general consensus that mortgage rates will settle somewhere below 5 per cent.

Five-year mortgage swap rates are currently at around 3.5 per cent, suggesting that this is where banks believe interest rates will be in five years’ time.

But as we saw in the Autumn events can change rapidly, and no one can ever say with certainty where rates will be at any one point in the future.

So if you are remortgaging or buying a home, is it worth going for a 10-year deal?

Falling rates: Fixed rates have been steadily falling since peaking in October last year

Falling rates: Fixed rates have been steadily falling since peaking in October last year

Ten-year mortgages: The advantages  

The strongest argument in favour of fixing your mortgage for 10 years is the certainty it brings. 

If your current house is going to be your ‘forever home’ and you want to put in place a plan to pay off the mortgage by a certain date, a ten-year fix offers you the ability to plan long-term.

It also insulates you from any future rate rises. For the next year or so, many brokers say interest rates between four and five per cent will be  the ‘new normal’ – so it could allow you to lock in your mortgage at that kind of level. 

However, it is harder to predict where mortgage rates will go further into the future. If they fell, you would be stuck paying over the odds and would not be able to leave the mortgage without paying an early repayment charge.

That may be easier to swallow for those who don’t have long left on their mortgage term, and may be paying less each month.  

‘Tying yourself into a 10-year will only be sensible for those coming to the end of their mortgage that want the security to know what they are paying and not have to review,’ says mortgages technical director at John Charcoal, Nicholas Mendes.

Security: Fixing your mortgage for a longer term adds certainty to your financial planning

Security: Fixing your mortgage for a longer term adds certainty to your financial planning

Ten-year mortgages: The downsides 

For first-time buyers or those who are on the second wrung of the property ladder, a cheap ten-year fixed rate may sound appealing.

But at the moment, the Virgin Money deal and Halifax’s rate – the next cheapest – are only for those with large or medium deposits. 

For borrowers who need more than 75 per cent loan-to-value the price of a 10 year fix rises to around 4.82 per cent, more expensive than many of the shorter fixed-term deals.

The lack of flexibility in the product could also impact borrowers’ decision making.

Having children or needing to move for a job can change what you want from your property, and a decade is a long time to commit to one house. 

Some long term deals allow you to port the mortgage to a new property, but it will still need to fit the lenders’ requirements so can’t always be guaranteed. 

If homeowners have a sudden change of circumstances such as a significant salary increase or job loss, they could find themselves trapped by eye-watering early repayment charges to escape the loan.

Riz Malik director at R3 Mortgages says, ‘It can be tempting to consider long-term fixed rates and many people did last year when rates were volatile. 

‘However, these products usually come with tiered or flat early repayment charges. This means if your circumstances change you could be left paying a big penalty to exit the deal.’

Ten-year fixed mortgages often contain large early repayment charges trapping borrowers

Ten-year fixed mortgages often contain large early repayment charges trapping borrowers

The second big risk is that rates fall significantly and you end up overpaying for your mortgage, compared to those who are able to take out new loans. 

Although it is currently expected that fixed rates on mortgages will sit between 4 per cent and 5 per cent, some experts expect prices to fall through 2023 and in to next year. 

This makes it more beneficial to fix for a shorter period, giving you the flexibility to change if rates fall.

‘The price war is well and truly in full swing with lenders consistently looking to undercut each other at the moment as they fight for mortgage share in a quieter mortgage market,’ says Jamie Lennox, director at Dimora Mortgages.

‘People will need to think carefully before fixing for such a long duration. The promising outlook is that it may not be that long before other lenders join Virgin money with sub 4 per cent rates and that we may even see shorter-term fixes follow suit.’

Compare true mortgage costs

Work out mortgage costs and check what the real best deal taking into account rates and fees. You can either use one part to work out a single mortgage costs, or both to compare loans

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Luxurious Sandbanks penthouse with balcony shaped like bow of a boat could be yours for £3.5m

A luxurious seaside penthouse in the Sandbanks that has a balcony shaped like the bow of a boat has gone on the market for £3.5million.

High Tides is a four-bed property with stunning views of the millionaires’ enclave of Sandbanks and Poole Harbour.

It is the ultimate waterside lifestyle apartment with its own boat store and direct water access from a shared slipway.

The glass balconies around the main bedroom and the open plan living space give the feeling of being on a ship on the water.

It is in the sought-after Lilliput area, which is on the edge of the harbour and next to the Sandbanks peninsula.

This is the luxury Sandbanks penthouse that has a balcony shaped like the bow of a boat

This is the luxury Sandbanks penthouse that has a balcony shaped like the bow of a boat

The unique property has gone on the market for a whopping £3.5million

The unique property has gone on the market for a whopping £3.5million

The property is one of four apartments in the architecturally-striking building, with high quality fixtures and fittings throughout and there is an option to include all the furniture if wanted.

The duplex apartment has 2,514 sq ft of accommodation with a lift access.

On the first floor there are two bedrooms at the back, each with their own en suite and at the front is a large open plan kitchen/dining/living room with bi-fold doors opening up to the bow-like balcony.

On the second floor the main bedroom has double doors opening onto another boat-style balcony with an en suite and a dressing room and at the back is the fourth bedroom, again with an en suite.

The property also has a garage and boat store, which currently houses a 23ft amphibious RIB but could also store kayaks and paddleboards.

Sean Gibson from Savills, who are selling the penthouse, said: ‘High Tides is a truly exceptional waterside duplex penthouse with spectacular views, located on an incredibly exclusive stretch of Poole Harbour.

‘This property is the ultimate lifestyle apartment on the edge of the water, perfect for people looking to enjoy water sports, boating or to even just relax and soak in the stunning scenery, views and astonishing sunsets.

‘Throughout the property has high quality fixtures and fittings and has been elegantly styled and finished, creating beautifully calm spaces with stylish decor and great attention to detail. There is the option to include all furniture for a turnkey property you can start to enjoy straight away.

The duplex apartment has 2,514 sq ft of accommodation with a lift access

The duplex apartment has 2,514 sq ft of accommodation with a lift access

At the front of the house is a large open plan kitchen/dining/living room with bi-fold doors opening up to the bow-like balcony

At the front of the house is a large open plan kitchen/dining/living room with bi-fold doors opening up to the bow-like balcony

‘The floorplan has been intelligently designed maximising the space on offer and of course the water views. Due to the amount of large glazing and bi-folding doors, the property is flooded by natural light especially when the sunlight bounces off the water.

‘The open plan kitchen, dining and living area is positioned on the waterside where the water appears so close that it gives the feeling of being on a ship.’

Yesterday, it was revealed that a luxury house is set to become the most expensive property ever sold on Sandbanks after a £15m deal was struck to buy it.

The five-bedroom beachfront mansion, which has an outdoor infinity swimming pool, belongs to an entrepreneur who grew up in a council house.

Robert Kay bought the property on the exclusive peninsula in Poole, Dorset, for £4m back in 2013.

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Britain’s most expensive and cheapest places to buy or rent a home revealed

The most expensive and cheapest places to buy or to rent in Britain have been revealed.

Aberdeen tops the list of the cheapest cities for first-time buyers, while the most expensive is perhaps no surprise, London, where average prices tend to be higher than the rest of the country.

It is a similar picture for the most expensive places to rent, with the capital ranked top of that list too.

On the flipside, tenants are also required to head north if they want to live in the cheapest city to rent, Carlisle, in Cumbria.

The cheapest cities for first-time buyers and tenants have been identified by Rightmove

The cheapest cities for first-time buyers and tenants have been identified by Rightmove

The figures were based on monthly mortgage and rent costs.

Home purchase figures calculated by Rightmove assumed that first-time buyers in Scotland and Wales have a 20 per cent deposit, and first-time buyers in England have a 25 per cent deposit.

The size of deposit was based on averages from UK Finance, which revealed that more first-time buyers are choosing longer repayment terms to improve their affordability.

As such, the repayment term used in the Rightmove calculations was 35 years. Rightmove also assumed that the typical first-time buyer property had two bedrooms or less.

Aberdeen tops the list compiled by Rightmove of the cheapest cities for first-time buyers

Aberdeen tops the list compiled by Rightmove of the cheapest cities for first-time buyers

THE CHEAPEST CITIES TO BUY A TYPICAL FIRST-TIME BUYER PROPERTY
Cities Average asking price for a first-time buyer type property (2 bedrooms and fewer) Average monthly mortgage payment (per month)* Average monthly rental payment (per month) Mortgage versus Rent
Aberdeen £102,601 £406 £775 -£369
Bradford £107,929 £400 £714 -£314
Sunderland £111,263 £413 £648 -£235
Carlisle £111,268 £413 £607 -£194
Preston £112,273 £416 £787 -£371
Hull £113,920 £423 £638 -£215
Dundee £116,191 £460 £821 -£361
Stoke-On-Trent £117,113 £434 £701 -£266
Durham £125,957 £467 £796 -£328
Doncaster £128,062 £475 £707 -£232
Source: Rightmove       
THE MOST EXPENSIVE CITIES TO BUY A TYPICAL FIRST-TIME BUYER PROPERTY
Cities Average asking price for a first-time buyer type property (2 bedrooms and fewer) Average monthly mortgage payment (per month) Average monthly rental payment (per month) Mortgage versus Rent
London £501,934 £1,862 £2,264 -£402
St. Albans £391,964 £1,454 £1,509 -£55
Cambridge £361,429 £1,341 £1,533 -£193
Winchester £344,638 £1,278 £1,332 -£53
Oxford £338,085 £1,254 £1,561 -£307
Brighton £335,402 £1,244 £1,468 -£224
Bristol £280,112 £1,039 £1,336 -£297
Chelmsford £262,522 £974 £1,300 -£326
York £244,834 £908 £1,145 -£237
Edinburgh £239,028 £946 £1,310 -£365
Source: Rightmove       

The average asking price in Aberdeen is £102,601, with the average monthly mortgage payment at £406 a month.

The most expensive city is followed by Bradford with an average asking price of £107,929 and Sunderland, which is ranked third with an asking price of £111,263.

For those in the rental market, the most expensive place to rent outside of London is Oxford, where an average two-bedroom or small home costs £1,561 a month.

At the other end of the scale, the cheapest city for a tenant who is looking for a two-bedroom or smaller property is Carlisle where such rents are £607 a month.

Mortgage rates are slightly higher than a year ago, but have stabilised since the peak in July 2023.

Rightmove explained that this has helped those looking to move at the start of this year.

The average mortgage payment for a typical first-time buyer looking at a property with two bedrooms or less is £53 more than a year ago, compared to £81 for tenants.

It means that those who can afford to save a good sized deposit of at least 20 per cent, it is cheaper to pay a monthly mortgage than rent in each of the largest cities in Britain.

Winchester is among the most expensive cities for first-time buyers looking for a property with two bedrooms or fewer

Winchester is among the most expensive cities for first-time buyers looking for a property with two bedrooms or fewer

Mark Harris, of mortgage broker SPF Private Clients, said: ‘We remain a nation of aspirational homeowners, despite higher mortgage rates and the difficulty in raising a deposit. 

‘Renting may give more flexibility but also less security and crucially ends up costing more than buying your own place.

‘However, the high cost of home ownership, particularly in London and the south east means that it’s practically impossible to get on the housing ladder without financial assistance from family members. 

‘Longer mortgage terms are inevitable as borrowers try to make the monthly costs more affordable but of course they will end up making many more payments over an extended period of time. 

‘It is worth opting for a longer term to help with the affordability calculations and then trying to overpay to reduce the term and interest, as and when you can afford to do so.’

Carlisle in the country of Cumbria is the cheapest city for those looking to rent

Carlisle in the country of Cumbria is the cheapest city for those looking to rent

THE CHEAPEST CITIES FOR TENANTS
Cities Average monthly rental payment (per month) Average asking price for a first-time buyer type property (2 bedrooms and fewer) Average monthly mortgage payment (per month)* Rent versus mortgage
Carlisle £607 £111,268 £413 £194
Hull £638 £113,920 £423 £215
Sunderland £648 £111,263 £413 £235
Stoke-On-Trent £701 £117,113 £434 £266
Doncaster £707 £128,062 £475 £232
Bradford £714 £107,929 £400 £314
Wrexham £754 £129,649 £513 £241
Lancaster £764 £152,062 £564 £200
Aberdeen £775 £102,601 £406 £369
Preston £787 £112,273 £416 £371
Source: Rightmove       
THE MOST EXPENSIVE CITIES FOR TENANTS
Cities Average monthly rental payment (per month) Average asking price for a first-time buyer type property (2 bedrooms and fewer) Average monthly mortgage payment (per month)* Rent versus mortgage
London £2,264 £501,934 £1,862 £402
Oxford £1,561 £338,085 £1,254 £307
Cambridge £1,533 £361,429 £1,341 £193
St. Albans £1,509 £391,964 £1,454 £55
Brighton £1,468 £335,402 £1,244 £224
Bristol £1,336 £280,112 £1,039 £297
Winchester £1,332 £344,638 £1,278 £53
Edinburgh £1,310 £239,028 £946 £365
Chelmsford £1,300 £262,522 £974 £326
Milton Keynes £1,239 £233,320 £865 £373
Source: Rightmove       

Meanwhile, soaring rents across Britain mean that the cost of renting a two-bedroom or small home has increased by 39 per cent in the last five years.

This compares to a jump of 19 per cent in the cost of buying a similar type of property.

Rightmove claimed that even if a first-time buyer had a smaller deposit of 15 per cent and sought to repay their mortgage over a shorter mortgage term of 25 years, it would still be cheaper to pay a mortgage than rent in 39 out of Britain’s 50 largest cities outside of London.

Rightmove’s Tim Bannister said: ‘These latest figures highlight why so many people remain determined to get onto the ladder, as the soaring costs of renting has meant buying has remained attractive even with higher mortgage rates.

‘Longer mortgage-terms are becoming more common as a way to improve overall affordability and reduce monthly payments, though first-time buyers should be aware of what they are paying in interest compared with their actual mortgage.

‘Without improvements to the supply of good quality, affordable rental homes in Great Britain, owning your own home is likely to continue to be the end-goal for those that can get their deposit together, and borrow what they need to from a mortgage lender.’

Best mortgage rates and how to find them

Mortgage rates have risen substantially after the Bank of England’s raised base rate rapidly.

The Bank is now holding rates and expected to cut – leading to mortgage costs coming down – but deals remain far more expensive than two or five years ago. 

If you are looking to buy your first home, move or remortgage, or are a buy-to-let landlord, it’s important to get good independent mortgage advice from a broker who can help you find the best deal. 

To help our readers find the best mortgage, This is Money has partnered with independent fee-free broker L&C.

Our mortgage calculator powered by L&C can let you filter deals to see which ones suit your home’s value and level of deposit.

You can also compare different mortgage fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes, with monthly and total costs shown.

Use the tool at the link below to compare the best deals, factoring in both fees and rates. You can also start an application online in your own time and save it as you go along.

> Compare the best mortgage deals available now

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Aviation and Telecom Industries Reach Compromise on 5G Deployment

The Voice Of EU | In a significant development, AT&T and Verizon, the two largest mobile network operators in the United States, have agreed to delay the deployment of 5G services following requests from the aviation industry and the Biden administration. This decision marks a crucial compromise in the long-standing dispute between the two industries, which had raised concerns over the potential interference of 5G with flight signals.
The aviation industry, led by United Airlines CEO Scott Kirby, had been vocal about the risks of 5G deployment, citing concerns over the safety of flight operations. Kirby had urged AT&T and Verizon to delay their plans, warning that proceeding with the deployment would be a “catastrophic failure of government.” The US Senate Commerce Committee hearing on the issue further highlighted the need for a solution.
In response, US Transportation Secretary Pete Buttigieg and Federal Aviation Administration (FAA) head Steve Dickson sent a letter to the mobile networks, requesting a two-week delay to reassess the potential risks. Initially, AT&T and Verizon were hesitant, citing the aviation industry’s two-year preparation window. However, they eventually agreed to the short delay, pushing the deployment to January 19.
The crux of the issue lies in the potential interference between 5G signals and flight equipment, particularly radar altimeters. The C-Band spectrum used by 5G networks is close to the frequencies employed by these critical safety devices. The FAA requires accurate and reliable radar altimeters to ensure safe flight operations.

Airlines in the US have been at loggerheads with mobile networks over the deployment of 5G and its potential impact on flight safety.

Despite the concerns, both the FAA and the telecoms industry agree that 5G mobile networks and airline travel can coexist safely. In fact, they already do in nearly 40 countries where US airlines operate regularly. The key lies in reducing power levels around airports and fostering cross-industry collaboration prior to deployment.
The FAA has been working to find a solution in the United States, and the additional two-week delay will allow for further assessment and preparation. AT&T and Verizon have also agreed to not operate 5G base stations along runways for six months, similar to restrictions imposed in France.
President Joe Biden hailed the decision to delay as “a significant step in the right direction.” The European Union Aviation Safety Agency and South Korea have also reported no unsafe interference with radio waves since the deployment of 5G in their regions.
As the aviation and telecom industries continue to work together, it is clear that safe coexistence is possible. The delay in 5G deployment is a crucial step towards finding a solution that prioritizes both safety and innovation. With ongoing collaboration and technical assessments, the United States can join the growing list of countries where 5G and airlines coexist without issue.

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