More and more borrowers are choosing longer-term fixed rate mortgages of up to 10 years, according to Spicerhaart Financial Services. There's an obvious attraction to fixed rates in times of uncertainty: they give borrowers the peace of mind of knowing how much repayments are going to be in the future. Securing a mortgage at a rate you can afford means there's no need to worry about interest rate movements during the period of the loan.

However, the downside is that you could end up paying over the odds - if interest rates fall during the time of your fix.

You could also be facing problems if interest rates rise during the fixed period, as tens of thousands of people have discovered this summer. With new deals around 2% higher than those offered a couple of years ago, people coming to the end of fixes now are experiencing severe 'rate shock' with their mortgage repayments soaring.

With lenders currently offering lower rates on longer-term deals than traditional two-year fixes, it seems a logical decision to seek out a longer-term deal. But is it wise to fix for longer than two years or as much as 10 years? Rob Elmes, mortgage consultant at London advisers Savills Private Finance, warns of the risk of interest rates falling in the future.

"The difficulty in recommending a long-term fixed rate is the uncertainty of which way interests rates will go in the future," Mr Elmes says. "Although guessing the future of interest rates has always involved some crystal ball gazing, this seems to be harder than ever to predict."

He says borrowers should consider all factors when choosing the length of the fix. Your age is relevant, for instance. Will the loan take you into retirement? What about your work prospects? Will your income increase significantly in the future? It's also essential to look closely at your budget, Elmes advises. Is your budget tight? And what's your attitude to risk?

"Another important issue is the cost of remortgaging," Mr Elmes points out. "You would have to remortgage four times on a two-year loan compared to a ten year mortgage.  Although many lenders offer remortgage packages, the rates for these are historically higher and you may be asked to pay deed release fees and telegraphic transfer fees."

Peter O'Donovan, head of mortgages at London IFA Bestinvest, agrees it's a difficult question to answer: "A lot of borrowers ask me the same question and usually add the proviso 'I know you haven't a crystal ball but ...'. But they still expect us to tell them what is going to happen and base their requirements on that answer.

"At the moment lenders are not behaving as we are used to. Some are reducing rates, some increasing, so it is difficult to see a pattern which may help in looking long term. At the moment it would take a couple of reductions in the base rate for the best variable rates to go below the best fixed rates."

He says an alternative is to look at lifetime tracker mortgages, some of which only have a three year tie-in. "After three years you have the choice to remain tracking the base rate and avoid another set of remortgage charges, or move to a fixed or better tracker." 

There is clearly no definitive answer. Whichever route you choose could lead to disappointment, so the key is to decide which factors are more important to you. If having certainty about your mortgage repayment is more important than possibly saving a little money, then a long-term deal could be best. If you always want to know that you've got the best or near-best deal, then you shouldn't consider anything longer than a two-year fix.

Simon Read

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