Atom Bank has slashed its five-year rates so they are now on par with its two-year mortgage products.
Interest rates for a five-year fix start at 1.29% for customers with a 40% deposit and a £900 fee.
For borrowers with a smaller deposit of 10%, interest rates have been reduced to 1.99% for five years with a £900 fee.
New mortgage customers will be able to apply for a five-year mortgage at the two-year rate via one of the bank’s intermediary partners. Products will be available via intermediary sourcing systems or via the online portal.
Director of retail mortgages, Maria Harris, said: “This move is entirely unprecedented, but we know consumers have an appetite for it. The recent success of our disruptive savings pricing has taught us that. We are in a position where we can help people improve their financial situation for the long term by reducing the amount they have to pay on their mortgage.”
Rates have been historically low for a long time, but there are signs things are changing. The cost of two-year fixed rate mortgages has started to move up slightly, and five-year fixed rates have seen their first increase since September 2015.
Atom Bank is hoping to revolutionise the mortgage market with its new app that allows you to take out a home loan on your mobile.
The digital lender launched a range of residential mortgages for first-time-buyers, the self-employed, contractors and the retired last December.
You first have to go through a broker who then recommends a mortgage. Once you have done this you can download an app and log in with face and voice biometrics to track your application progress every step of the way.
All updates and communication are done via the app and you can accept a mortgage offer with a tap of your phone. The app also keeps and stores all key documentation automatically.
The mortgages have been designed to remove the frustrations of the traditional application process – providing instant updates to the broker and the customer.
Atom obtained its banking licence in June 2015 and launched the new bank in April last year with two fixed saver accounts.
The range includes:
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60% LTV with £900 fee: reduced by 0.60% to 1.29%
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60% LTV without fee: reduced by 0.35% to 1.64%
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75% LTV with £900 fee: reduced by 0.65% to 1.34%
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75% LTV without fee: reduced by 0.45% to 1.74%
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80% LTV with £900 fee: reduced by 0.60% to 1.49%
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80% LTV without fee: reduced by 0.40% to 1.89%
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85% LTV with £900 fee: reduced by 0.65% to 1.59%
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85% LTV without fee: reduced by 0.45% to 1.99%
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90% LTV with £900 fee: reduced by 0.80% to 1.99%
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90% LTV without fee: reduced by 0.55% to 2.44%
