HSBC: Top 10 reasons to fix a mortgage for 10 years
Seven in ten house-hunters (72 percent) would consider fixing their mortgage for 10 years as a way of providing certainty on financial outgoings, according to new research commissioned by HSBC.
The research, which marks the launch of HSBC’s new 10 year fixed rate mortgage at 2.79%, also revealed that millennials are most likely to seek mortgage stability with almost 8 in 10 (78 percent) willing to consider fixing for 10 years, followed by Londoners (71 percent), those in the North East (62 percent) and Yorkshire & Humberside (51 percent).
The findings also show:
- One quarter more men (56 percent) than women (45 percent) would consider committing to a long-term relationship with a mortgage and fixing for 10 years;
- Nearly half of Brits (45 percent) cited the stability and security of knowing how much they have to pay each month as the top reason for considering fixing their mortgage rate for 10 years;
- One third (34 percent) feel uncertain about how mortgage rates may change in the future
Top reasons for wanting to fix a mortgage for 10 years:
- Stability and security (45 percent)
- Makes budgeting easier (43 percent)
- Financial peace of mind (41 percent)
- Reducing stress (35 percent)
- Uncertain about mortgage rates changing in the future (34 percent)
- Would feel secure as I don’t know what will be doing in 10 years (26 percent) and convenience (26 percent)
- To focus on more important things (23 percent)
- Previous experience of mortgage rate increases (22 percent) and avoiding having to do the required administration (22 percent)
- It would be helpful in applying for other financial products (18 percent)
- Due to recent increases in stamp duty and not wanting to risk mortgage rates going up (11 percent)
Tracie Pearce, HSBC’s Head of Mortgages in the UK said: “Ten years might seem like a lifetime away, yet our research shows that we like to plan ahead and are currently looking for security. Fixing a mortgage rate for the long term offers customers certainty that their mortgage repayments will not increase over that period.
“Our commitment to offering value to our customers can be seen with our 2 year fixed rate at 0.99%, our 5 year fixed rate at 1.99% and now our new 10 year fixed rate at 2.79%. Fixing a mortgage now can give homeowners important peace of mind, and the new 10 year products offer the assurance that their mortgage rate won’t change regardless of what else might happen with the economy or what the Bank of England Base Rate does."
Read the July EURO 2016 issue of Business Review Europe magazine.