Mortgage question

I've been trying to figure out the whole home buying thing in the UK.  And I've come to the conclusion that true fixed rate mortgages do not exist over there.  That you can get something similar to an ARM, where you have a fixed rate for a set period of time (generally 1-5 years) and then it reverts to a variable rate loan. 

Is this correct?  Is it impossible to get a mortgage with a fixed rate for the life of the mortgage?

Thanks.

Is this correct?  Is it impossible to get a fixed rate for the life of the mortgage ?

I used to be a mortgage advisor for the Halifax, and our fixed rate offers were for a maximum of 5 years.   Same with our main competitors.

Im not going to say that a fixed rate for the life of the loan doesnt exist, but i've never seen one.

The longest fixed rate offer we saw was for 10 years, but the rate was quite high.

Thanks.  That's what I was afraid of.

10 year mortgages do seem to be the longest, although there may be some niche company out there that does longer but I wouldn't be surprised if the rate was really high.  Halifax and Nationwide definitely do 10 year fixes.

I suppose fixing a rate for 30 years means you never have to worry about fluctuations but then again, if you look at 30 year rates in the US at, say, 6.5% with no points compared to a 4 to 5 percent 5 year fix in the UK you could be saving at least 1.5% over those 5 years.  Quite a lot of money to be saved.  Yes, you'll need to remortgage after 5 years but the few hundred pounds spent would be peanuts.  I suppose the rate could go up quite a lot but then again it could go down.  Unless there's serious inflation you'd be doing well, and if there was deflation you'd really be cashing in on an even lower rate.

We did have a 25 year fix in the UK a couple of years back; but unlike the US these were NEVER fashionable.  Given that remortgaging has become a way of life on both sides of the pond over - say - the last 10 years, this is not really an issue or an opportunity any more.

We did have a 25 year fix in the UK a couple of years back; but unlike the US these were NEVER fashionable.  Given that remortgaging has become a way of life on both sides of the pond over - say - the last 10 years, this is not really an issue or an opportunity any more.

I have friends who bought a house in MA 3 years ago and got a 4.5% 15 year fixed mortgage. I don't think they'll be refinancing soon.....

My fear is that over the lifetime of a mortgage I expect significant variations in interest rate.  I took a look at the historical figures for the Bank of England base rate and within the past 25 years the rate's been up at 17%.  A far cry from where it is now, and I feel nervous buying something with no idea of how much it's really going to cost.  At least in the US, I could get a variable rate mortgage and remortgage if I chickened out when rates started to rise.  In the UK, it seems you just sort of have to go with the flow.

Yes the variability of mortgage products really surprised me when I was looking at the various bank websites. I'm used to having the ability to get a fixed mortgage and lock in a rate. The UK products seem to be a real rip off.

re: the UK products being a rip-off, added to that, there is no mortgage interest income tax deduction here anymore, either!