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Mortgage Rate Wars Lead to Lowest 5-Year Fixed Rate Ever?


Mortgage Rate Wars

The mortgage rate wars continue to rage with lenders still having access to a large amount of cheap money that is swilling around.

In fact, it is so cheap right now that we have just seen the lowest 5-year fixed-rate ever hit the market from Nationwide. So low in fact, that I had to read it several times, check the small print, slap myself round the face, and sink a large brandy!

So, how about 5 years fixed at … 0.99%!!! Yes, that’s right, under 1% for 5 years. Literally giving it away.

As you would expect you need a healthy 40% deposit and there is a fee of £1,499 attached, but I for one never thought we would see a 5-year fixed at that level. To put that in some sort of context, when I started the most popular mortgage product of the day was a 9.99% 5-year fix that was flying off the shelves.

To complete the set their 2 and 3-year fixes are at 0.91% and 0.94% respectively.

Lowest Mortgage Rates Ever?

Lenders have been jostling for positions on the best buy tables for some weeks now and we could well see a couple of other lenders joining Nationwide at sub 1% for a 5 year fixed.

Looking at the market as a whole, I believe this is the most amount of sub 1% deals the market has ever seen with at least 8 lenders now having products at 1% or below.

For those with a healthy deposit or equity, this is probably the most competitive time ever to obtain a mortgage. Those who are coming to the end of their current mortgage deal have a fantastic opportunity to remortgage and switch to a lower rate now.

At the other end of the scale 90% LTV rates continue to also fall and are now available from 2.25% which is an exclusive product that Coreco has access to. At 95% LTV rates continue to also dip and are now available from 3.35%. Both are 2-year fixes.

The cheap money is likely to continue for some time yet as lenders have been able to access these funds through Government schemes such as The Term Funding Scheme, though it will not be around forever.

It will be interesting to look back and see just how low rates did actually go.

The only thing that seems to be holding the market back at the moment, apart from the promise of a holiday, is the shortage of stock across the board.

However, with lenders advertising rates this cheap, it may well entice more buyers to sell and move to that dream home they always wanted.

Watch this space…

Our Pick of the Latest Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 0.91% (3.30% APRC) and 5-year fixes from 0.99%, (2.40% APRC) whilst variable tracker rates are around from 1.00%, (3.20% APRC).

Those looking at Buy-To-Let can now obtain products from 1.19%, (4.40% APRC) for 2-year fixed or 5-year fixes are available from 1.69% (3.70% APRC).

To speak to one of our friendly mortgage experts about these rates or, well, anything mortgage-related please call us on 020 7220 5110 or send a message via our contact form.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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