The average rate for a 10-year fixed mortgage has dropped to a record low of 2.76% in November, Moneyfacts has revealed.
This average rate has fallen by 0.32% from 3.08% in November 2018.
Darren Cook, finance expert at Moneyfacts, said: “During a period of economic uncertainty, borrowers may be considering alternative ways to shield themselves against interest rate fluctuations and assure some stability in household expenses for the longer-term.
“A 10-year fixed rate mortgage is a large commitment, so potential borrowers need to feel confident that their circumstances are unlikely to change in the foreseeable future to benefit from the longer-term certainty that this product provides.
“It appears that the 2 and 5-year fixed rate markets are becoming saturated, meaning providers need to seek new avenues to attract new mortgage business.”
There are currently 17 providers competing in the 10-year fixed rate market, four providers more than a year ago and nearly double the number two years ago (nine providers).
There are 158 products currently available in the 10-year fixed rate market.
However, 108 products are only available to loan-to-values (LTVs) of 75% and below, while only two products are available at a maximum 95% LTV.
Cook added: “It appears that the 10-year fixed rate market may be geared towards the remortgage and second-time buyer market, as first-time buyers who step onto the housing ladder at 95% LTV are likely to want to remortgage down a LTV tier or two to get better rates as soon as they are able, and a 10-year stretch may well be far too long.
“As with any mortgage, it is important that borrowers weigh up the overall true cost of any deal and make every attempt to overpay their mortgage to reduce the amount they owe – especially if they lock into a low rate.”