HSBC, Nationwide, Santander, Virgin Money and Royal Bank of Scotland are among the mortgage providers who now have sub-5% deals on offer.
Whilst this might still seem like high rates of interest to those borrowers who locked into 1%, 2% or even 3% mortgages two years ago, the appearance of deals below 5% is positive news.
It indicates there will be more competitive options on the market for borrowers remortgaging or buying a home.
Data analyst, Defaqto, which has revealed the list of lenders with sub-5% deals, said there is also more choice available to borrowers thanks to the introduction of more three-year options.
These deals, which offer an alternative to a two-year fix or the longer-term five-year option, have become more plentiful in recent months. Defaqto said the numbers have risen by 100% since June.
Katie Brain, consumer banking expert at Defaqto, said: “Some borrowers might be viewing a three-year fixed term mortgage as the balance they need in order to still get a slightly preferential rate but without the same level of commitment as longer deals.
“With such volatility in the market place it’s still extremely difficult for people to predict what would serve them best but having increased options from lenders is positive for homeowners.”
Best deals on the market
According to Defaqto, Virgin Money is charging ahead in the five-year fixed rate mortgage war this week with rates of 4.82% for two of its mortgages. One is for home buyers who need to take a loan for 65% of the property’s value and the other for those with a slightly higher 75% loan-to-value (LTV) requirement.
Meanwhile Yorkshire Building Society is leading the way for remortgagers with its 4.99% rate for a five-year fixed rate 75% LTV product.
All these deals have fees attached – £1,495 with Yorkshire’s offering and £1,295 for Virgin Money’s options. So, it may be a good idea to speak to a mortgage adviser to assess whether the deal would work for you.
Moneyfactscompare, meanwhile, has flagged up NatWest’s online exclusive five-year mortgage with a fixed rate of 4.84%
Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said the deal which was for borrowers with a 75% loan-to-value came with a free valuation and a ‘reasonable’ £1,495 product fee, which can be added to the mortgage.
“This deal may attract those looking to save on the upfront cost and lock into a highly attractive fixed rate. Overall, the deal earns an Outstanding Moneyfacts product rating.”
It has also highlighted Vernon Building Society’s three-year fixed rate mortgage, 80% loan-to-value which has a rate of 5.50%.
Eastell said this made it the lowest deal on rate alone. It is available to both those purchasing or those remortgaging and there is no fee.
In the two-year fixed rate market she has highlighted Santander’s new deal priced at 5.43%, which is available to house purchase customers at 60% loan-to-value. It comes with a free valuation and product fee of £999.
