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The Great Mortgage Rate War

17.08.21

The great Mortgage Rate Wars keep on raging with, as predicted, more lenders wading into the frenzy for your business.

Nationwide are no longer alone with a 5-year fixed at under 1%, joined now by a slightly better looking 0.99% 5-year fixed from HSBC.

But the plaudits this week go to Halifax for blowing everyone out of the water with their new 2-year fixed rate priced at just 0.83% and a new 5-year fixed at 0.98%, (the latter for remortgages only).

Whilst this is all fine and dandy for those with at least 40% deposit or equity, have no fear! The other end of the spectrum is also not immune to the ravages of the rate war.

Those with a 10% deposit can now access rates from 2.19% for a 2-year fixed or 2.74% for a 5-year fixed, considerably cheaper than a few months ago.

Meanwhile, those with a 5% deposit can get a 2-year fixed from 3.09%, again lower than a few weeks ago.

What all this means is that we are getting into the realms of it being potentially cheaper to buy and pay a mortgage than it is to rent the same property. The key of course is raising that deposit in the first place.

As an example, if you were to obtain a mortgage of 75% LTV on a property costing £500,000 over a 25-year repayment term, you would be paying circa £1,450 per month on a 5-year fixed rate.

With a 10% deposit, the cost would be circa £2,080 per month.

With lenders still pushing for business, well-capitalised, and with cheap money to lend, we may see some more extraordinary headlines in the future.

Have a great week.

Best Mortgage Rates

In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 0.83% (3.20% APRC) and 5-year fixes from 0.99%, (2.60% 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).

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