Everywhere I read, I'm seeing rates are likely to increase in the near future.
The only person who knows when interest rates are likely to rise is Mario Draghi - any commentary from persons other than him is simply speculation.
But, over a 10 year period, it is difficult to see the ECB base rate to remain at <1% for that duration. When it will rise, and how high it rises is another matter and my crystal ball is broken.
Is there any negatives to having this piece of mind over 10 years. Or is this too long a period to sign up to, where anything could happen.
There are three main downsides to fixing - 1. you want to dramatically over-pay your mortgage and 2. you believe mortgage interest rates will drop further and you will be stuck on the higher rate and 3. you might roll over only a less favourable rate (e.g. SVR over LTV)
Regarding 1 (over-payments) - so my quick calculation is 270k @ 2.95% for 22 years = 1390 a month. KBC allow you to overpay by 10%, so you could increase this by 140 roughly, and would take 2 years 8 months off the mortgage and save roughly 12990 in interest over the lifetime.
Because KBC allow you to overpay, this only becomes an issue if you wish to overpay by more than 10%. Please check all these details with KBC and any rules around them.
Regarding 2 (future interest rates) - sorry cannot help you there as my crystal ball is broken
Regarding 3 (roll over rate) - be very clear on the loan agreement what the default rate is and what the rollover rate will be in 10 years time. Don't assume the same LTV products will be available then either, so it should be relatively generic such as "new business rates on rollover date". If you need to know how important this is, look through some of the tracker mortgage discussions
I think I can break out with not too harsh a penalty.
Never assume or think anything - get clarification from KBC on how the break penalty is calculated. You only need to worry if the interbank rate falls further negative. How likely is it that the interbank rate will rise or remain the same and the mortgage rates will fall? Maybe, but if it does it will do so in the next 12 months in my view
Should I be looking at other mortgage options.
You should always keep options open until you decide you want to make a final decision. A bank could change rates at the last minute making it more attractive
How do you feel about the UB 4 year fixed rate for example?
BTW, I have recently fixed my mortgage with KBC for 10 years, but have very personal reasons for doing so.