Coventry Building Society has launched the lowest ever 10-year fixed rate mortgage, beating the current record-low from Leeds Building Society.
It is available at an interest rate of 2.39% and comes with a 50% loan-to-value and a fee of £999.
The range also includes 10-year fix for those with a smaller deposit, which has an interest rate of 2.49% and comes with a 65% loan-to-value and a fee of £999.
Borrowers looking to pay off the loan before the end of 10-year term will pay 5% of the mortgage balance until 30 September 2018, 3% until 30 September 2021 and 1% for the remaining term.
Kevin Purvey, head of intermediaries at Coventry, said: “The recent fall in swap rates means we have an opportunity to offer market leading rates to borrowers looking for long-term security in these uncertain times. Today’s market is particularly fast-moving, however, so I’d encourage brokers to act now to secure this great product for their clients from Friday.”
Rachel Springall from Moneyfacts.co.uk said that there were now more 10-year fixed deals than ever before, with additional lenders likely to follow suit as the price war heats up.
She said: “These decade-long fixed mortgages are clearly becoming a new favourite amongst lenders who want to provide borrowers with a long-term option to secure monthly mortgage payments. This trend may well continue to grow in times of uncertainty, but borrowers must always work out the true cost of any deal and be sure that their circumstances will remain relatively unchanged for the next 10 years.
“The deals carry early redemption charges and because most of these run up to the final year of the initial fixed deal, these mortgages may not be appropriate for borrowers who want to move or remortgage in the next few years.”
The current 10-year fixed average rate is 3.84%. The lowest on record for a 10-year fixed mortgage is 2.84% with Leeds Building Society at 65% LTV and a £1,499 fee (currently available).
