Atom Bank has pulled its market beating 1.29% five-year fixed rate mortgage deal after only nine days. Last week, the bank slashed its five-year rates so they were on par with its two-year mortgage products. Interest rates for a five-year fix were cut to 1.29% for customers with a 40% deposit and a £900 fee. […]
Atom Bank has pulled its market beating 1.29% five-year fixed rate mortgage deal after only nine days.
Last week, the bank slashed its five-year rates so they were on par with its two-year mortgage products.
Interest rates for a five-year fix were cut to 1.29% for customers with a 40% deposit and a £900 fee.
The bank said it had withdrawn the deal due to high demand.
“Our rates, like everyone else’s, are continuously under review and subject to change,” the bank said in a statement.
The five-year fix at 1.64% with no fee was also withdrawn.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “With the bank online only they are able to move fairly quickly if the need to amend rates. These rates were promoted as if the deals were on sale, so the length of time on the market would have been short-lived.
“Atom Bank’s mortgage strategy was similar to it savings establishing themselves and quickly become the best product available and topping best buys. With customers unaware of who they were before with deals like these they will certainly take note now.
“It is a possible they have taken a loss at these low rates but with them offering some of the best savings rates in the past they access to cash that they now need to lend out.”
Atom Bank is hoping to revolutionise the mortgage market with its app that allows you to take out a home loan on your mobile.
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.
Atom Bank’s mortgages as of 00.01am on 20 April 2017
| LTV | Fee | Two-year rate | Five-year rate |
| 60% | With £900 fee | 1.29% | n/a* |
| 60% | Without fee | 1.64% | n/a* |
| 75% | With £900 fee | 1.34% | 1.34% |
| 75% | Without fee | 1.74% | 1.74% |
| 80% | With £900 fee | 1.49% | 1.49% |
| 80% | Without fee | 1.89% | 1.89% |
| 85% | With £900 fee | 1.59% | 1.59% |
| 85% | Without fee | 1.99% | 1.99% |
| 90% | With £900 fee | 1.99% | 1.99% |
| 90% | Without fee | 2.44% | 2.44% |
*rates removed as of 00.01am on Thursday 20 April 2017
Borrowers with a 25% deposit can still get a five-year fixed deal at the same rate as the two-year version.
“Despite the withdrawal of this product from the market the other mortgages from Atom Bank are still some of the lowest on the market today with the competition still lagging behind,” said Nelson.
“Borrowers may feel like they blinked any missed the lowest mortgage deal that the market has seen, but this shows that this type of offer will only have a very short shelf life.
“These low rates cannot last forever so borrowers thinking about a deal should act fast.”
David Hollingworth, director at broker London & Country Mortgages, said: “These rates were so far ahead of the rest of the market that it was always going to be a matter of time before something had to give. As a result the very lowest rates have only lasted a week.
“However it is only the very lowest rates that have been withdrawn so borrowers still have a chance to take advantage of the remaining deals.
“Given the lowest rate is now 1.34% fixed for five years we fully expect that borrowers will still clamour for what remain exceptional rates. Of course how long the rest of the range will last is anybody’s guess but it’s unlikely to be long.”
| Lowest five-year fixed rate mortgages | |||
| Lender | Rate Details | Maximum LTV | Fees |
| Digital Mortgages by Atom Bank | 1.34% Fixed to 30/06/2022 | 75% | Arrangement £900 |
| Digital Mortgages by Atom Bank | 1.49% Fixed to 30/06/2022 | 80% | Arrangement £900 |
| Digital Mortgages by Atom Bank | 1.59% Fixed to 30/06/2022 | 85% | Arrangement £900 |
| Barclays Mortgage | 1.70% Fixed to 31/05/2022 | 60% | Arrangement £1499 |
| first direct | 1.74% Fixed for five years | 60% | Booking £1450 |
Source: Moneyfacts.co.uk
What Mortgage has teamed up with London & Country to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
