INTEREST rates were kept on hold last week, but borrowers are still flocking into fixed mortgages due to fears that base rate could go up later this year. Some are even opting to fix for 10 years because rates are lower than on five-year deals.

The Bank of England’s monetary policy committee (MPC) voted to keep interest rates at 4.75% last week, but most economists polled by Reuters, the data firm, think there will be a further quarter-point increase in November.

The risk of further rises has caused huge demand for fixed rates. Short-term fixes are still the most popular — 75% of people opted for two-year deals last month, according to Mortgagesdirect, a broker — but 10-year deals are looking increasingly competitive and you do not have the hassle of remortgaging every couple of years.

David Hollingworth at L&C Mortgages, a broker, said: “While the majority of people still prefer short-term deals because it gives them the flexibility to reassess their circumstances every few years, the cost of remortgaging is rising because fees have gone up so much. An increasing number of people are looking to lock into longer-term deals as a result.”

At present Halifax has the best two-year fix at 4.49%. This is only available for purchases and a minimum deposit of 25% is required. While the rate is low, there is a fee of £1,499 which means it is only good value if you are borrowing more than about £150,000.

Leeds building society and Woolwich, the mortgage arm of Barclays, have the best 10-year rates, priced at 4.97% and 4.98% respectively. The best five-year mortgage, by contrast, is Cheltenham & Gloucester’s at 5.09%. This is available only through brokers for loans up to 90%, and the arrangement fee is £799.

A 10-year fix is now cheaper than a five-year deal because, while the money markets expect rates to go up in the short term, the longer term outlook is stable.

Nick Gardner at Chase de Vere Mortgage Management, another broker, said: “A 10- year fix looks fantastic value at the moment. Mortgage rates below 5% are historically very low, so locking into these deals may well be an astute move.”

Matthew and Shona Gladstone have done just that. They live in Harrogate and are remortgaging, switching to a 10-year fixed rate from Woolwich at 4.98% after their two-year fix from Britannia comes to an end.

Matthew, 34, who is head of performance at Rotherham metropolitan borough council, said: “We wanted long-term stability and decided to go for this deal because the rate was lower than on the best five-year fix. ”

If you want to follow their example, the 10-year deal from Leeds requires a deposit of 10%, while you must put down at least 20% for the Woolwich loan. However, Woolwich’s scheme has a lower fee at £595, compared with £695 at Leeds and it calculates interest on a daily basis. Leeds uses annual interest, so its product works out more expensive for anyone with a repayment mortgage.

Remember you will probably be locked into a fixed deal by early-redemption charges for the duration of the fixed term. Woolwich, for example charges 6% of your outstanding loan if you redeem its 10-year fix early.

Most mortgages are now portable, meaning you can transfer them to a new property if you move, but brokers say this is not ideal as the chances are you will need to borrow a different amount, so you might have to take out a second loan.

Melanie Bien at Savills Private Finance, another broker, said: “The length of fix you opt for should reflect your own circumstances. If there is a chance you might move house in the next 10 years, I would opt for a shorter-term deal. If you intend to stay put, locking into a 10-year fix may be a good option.”