The mortgage market is currently experiencing the lowest rates on two, three and five year fixed deals since their launch in 1989.
Research from Moneyfacts has revealed that rates started a slow descent shortly after the government’s Funding for Lending Scheme began last August and have picked up speed with new ‘best ever’ deals coming onto the market almost daily.
Bank of England Base Rate fell to its current historic low in March 2009; four years later and it has been matched with historically low mortgage rates too.
Not only are averages in freefall, many individual providers are joining the downward race with gusto as those that have joined the FLS must increase their loan books or face stiff penalties.
| Average Fixed Rate Mortgages | |||||
| Feb-09 | Feb-10 | Feb-11 | Feb-12 | Feb-13 | |
| 5 Year | 5.67% | 6.00% | 5.41% | 4.64% | 4.14% |
| 3 Year | 5.56% | 5.47% | 5.05% | 4.63% | 4.36% |
| 2 Year | 4.88% | 4.82% | 4.49% | 4.36% | 4.11% |
| Source: Moneyfacts.co.uk | |||||
Sylvia Waycot, Editor at Moneyfacts.co.uk, said: “At last we have some good news to talk about with regards to finance; fixed mortgage rates are coming down.
“Of course, this doesn’t mean it will be any easier to get a mortgage approved, you will still need to have a clean credit record, income sufficient to not only pay today’s mortgage rate but also potential future increases and of course the stickler for most, the deposit.
“But if you can satisfy the banks’ lending criteria and have a deposit or equity from a current house, then there are some amazing offers to be had.
“Recent criticism levied at banks was that they were offering the best mortgage deals in the less risky 60 per cent loan-to-value (LTV) tier. It is good news on that front too, as some very attractive higher LTV loans are at last entering the market.
“To put the current rates into context, if you had opted for a two year fixed in June 1989, you would have paid an average rate of 12.83 per cent (the least competitive rate was a breath stopping 13.20 per cent). A five year fixed averaged out at 12.85per cent.”
| 2 Year Fixed Rates | ||||
| Lender | Rate | Maximum LTV |
Fees | |
| Chelsea BS | 1.89% Fixed to 30/04/2015 | 60% | £1,695 | Lowest on Moneyfacts records |
| NatWest Int Sols | 2.29% Fixed to 31/05/2015 | 70% | £1,995 | Lowest since Feb 2011 |
| Market Harborough BS | 2.75% Fixed to 31/03/2015 | 80% | £595 | |
| Chelsea BS | 3.69% Fixed to 30/04/2015 | 90% | £1,695 | Lowest since Sept 2007 |
| 3 Year Fixed Rates | ||||
| Lender | Rate | Maximum LTV |
Fees | |
| Nationwide BS | 2.59% for 3 years | 60% | £999 | Lowest since Jan 2012 |
| Abbey | 2.14% to 2.4.16 | 70% | 2.50% | Lowest on Moneyfacts records |
| Pink Home Loans Funded-West Brom BS |
2.93% to 30.4.16 | 80% | £995 | Lowest on Moneyfacts records (intermediaries only) |
| Leeds BS | 3.14% to 29.2.16 | 80% | £999 | Lowest direct product on our records |
| Loughborough BS | 4.09% for 3 years | 90% | £499 | Lowest on Moneyfacts records |
| 5 Year Fixed Rates | ||||
| Lender | Rate | Maximum LTV |
Fees | |
| Post Office® | 2.74% to 31.3.18 | 60% | £995 | Lowest on Moneyfacts records |
| Tesco Bank | 2.89% to 30.4.18 | 70% | £1,495 | Lowest on Moneyfacts records |
| Pink Home Loans Funded by West Brom BS |
3.10% to 28.2.18 | 80% | £1,694 | Lowest on Moneyfacts records (intermediaries only) |
| West Brom BS | 3.39% to 28.2.18 | 80% | £748 | Lowest direct product on our records |
| Hanley Economic BS | 4.20% to 30.4.18 | 90% | None | Lowest on Moneyfacts records |
| Source: Moneyfacts.co.uk | ||||
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