The majority of borrowers who choose a fixed rate mortgage opt for short terms, but Moneynet is asking whether now is the time to fix for the longer term, in preparation for the tough economic times ahead.

In light of the new 10 year fixed rate of 4.99 from Yorkshire Building Society, Moneynet suggests that long term fixed rate mortgages might become more popular with the new Prime Minister David Cameron warning that the next few years will be difficult.

With inflation running high, and economists forecasting that interest rates will start to rise in the foreseeable future, Andrew Hagger, spokesperson for Moneynet.co.uk, predicts that more people might be looking to lock in for longer.

Mr Hagger said that, like the rest of the mortgage market, the long term fixed rate market is “almost unrecognisable”, with just a handful of 10 year fixed rate mortgages to choose from compared to what it was like during its peak in 2007 when there were in excess of 85 fixed rates available for 10 to 30 years.

Some homeowners will be biding their time until they are sure that interest rates have bottomed out, but Mr Hagger warns that if they are not careful they could miss the boat, because “rates can suddenly turn and start rising quite sharply before you’ve actually made your mind up.”

Commenting on the new 10 year fixed rate from YBS, he said that it is “an attractive looking rate and is currently a best buy, with fewer than 40% of mortgage lenders now charging a SVR lower than this.”

In addition to the security of knowing that mortgage payments will not rise, making it easier to budget, a long term fixed rate deal also means only paying one lending fee, Mr Hagger added, instead of paying five separate ones by switching to a new fixed rate every two years, in addition to potential redemption fees, valuation and legal fees, and the hassle of switching.

While tracker mortgages are currently cheaper than fixes, he explained that because they operate on margins of two or three per cent above the base rate, it will not take long for them to catch up with fixed rates once they start to rise.

Mr Hagger concluded: “So whilst 10 years may still seem a fix too far for many people, with a competitive sub five per cent rate and all the uncertainty surrounding future mortgage funding and the wider UK economy, it will be interesting to see the level of take up for this product and whether other providers will re enter the long term mortgage market.”

The 10 year fix from YBS offers a rate of 4.99 per cent with a fee of £995 for customers with a 25 per cent deposit, a 0.30 per cent reduction on its previous rate.

Tom Girling, product manager for Yorkshire Building Society mortgages, commented: “This product presents a fantastic opportunity for borrowers looking for long-term value, protection from future interest rate rises and piece of mind when it comes to their mortgage payments.”

© Fair Investment Company Ltd

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