Leeds Building Society and The Co-operative Bank are among the providers who have shelved their 10-year fixes in the past few days alone.
But, according to Moneyfactscompare.co.uk, the number of deals which allow borrowers to fix the interest rate for 10 years has fallen from 169 to 159 in the past week.
Meanwhile, the average rate on a 10-year fix has increased from 4.99% to 5.06% since the start of April. It compares to the average two-year rate which was 5.26% on 17 May and the typical five-year fixed rate which was 4.97%.
Pros and cons of fixing for 10 years
The 10-year fixed rate mortgage market is a pretty niche one, since locking into a deal for a decade can seem restrictive to many.
The main advantage to these deals comes if the borrower takes out their decade-long mortgage when interest rates are low and then they can remain safe from any future volatility in the markets.
But in times of high interest rates, borrowers may be more reluctant to lock in at a higher price in case rates go down again.
Could a lack of demand be driving the lenders’ decision to retreat from the 10-year fixed rate market?
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said there are several possibilities. “When lenders withdraw from such a niche sector, it can be in reaction to interest rate volatility, or even down to demand.
“However, this move may influence other lenders to follow suit and reconsider their own propositions.”
Springall added: “Those borrowers who want peace of mind with their mortgage repayments may well be comparing both five-year fixed mortgages and even 10-year fixed deals amid interest rate uncertainty, but these average interest rates are around 2% higher than they were a year ago.”
What to consider if you are thinking of taking out a 10-year mortgage
Whatever your motivation for fixing for 10 years it is always a good idea to speak to an adviser. For example, if you were to exit the deal early – to move home, for example – there may be penalty charges.
Springall added: “A decade-long fixed mortgage is a commitment, and consumers must be confident with the length of the term before they apply, as an early repayment charge would apply should they exit their mortgage early.
“Anyone considering a new mortgage would be wise to seek advice to go over the full package of any deal to find the right deal for them.”
