The introduction of the sub-1% mortgage means borrowers with at least 40% equity who need to move home or remortgage can lock into this competitive rate for five years.
Nationwide launched a two-year sub-1% mortgage last month, and several other lenders have similarly low priced deals. However, this is the first below-1% rate which is fixed for as long as five years.
The building society said it hoped this would offer more certainty to borrowers over payments for a longer period.
‘Phenomenally cheap’
Greg Cunnington, director of lender relationships and new homes at Alexander Hall welcomed the new deal and the savings they offered for borrowers.
He said: “These first ever sub-1% five year fixed rates from Nationwide are phenomenally cheap money, and show how good a time this is in the mortgage market for consumers.
“This follows the pattern of lower mortgage rates seen from all lenders in recent weeks, with rate decreases taking place once or twice a week from most major lenders, and the ever increasing number of mortgage products available (which are now at their highest level since the pandemic period).
“Although you will need a 40% deposit or equity to take advantage of these products, mortgage rates have been coming down at all deposit levels recently so if you have not reviewed your options recently now is a great time to do so.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, was equally as enthused. He said: “Just when it looked as though mortgage rates couldn’t possibly go any lower, they have.
’While there has been a flurry of sub-1% two-year fixes in recent weeks, this is the first five-year fix pegged at such a low rate.”
More to follow…?
He added: “With Nationwide also offering a two-year fix at 0.91 per cent, the building society has done the double with the cheapest two and five-year fixes on the market.
“As lenders are cash-rich and eager for business, we wouldn’t bet against others following suit and offering similarly cheap products in coming weeks.”
