Fixed rate mortgages hit a new record low today as competition among lenders intensified.
HSBC launched a two-year fixed rate deal at just 1.19 per cent, the lowest rate financial information group Moneyfacts has ever recorded.
Other lenders have also slashed their prices in recent weeks, with five lenders now offering two-year deals for less than 1.4 per cent.
The competition in the market has seen the average cost of a two-year fixed rate deal continue to fall, dropping to 3.27 per cent, down from 3.32 per cent at the start of the year.
Five-year fixed rate loans have also got cheaper, dropping to an average of 3.37 per cent, compared with 3.8 per cent at the beginning of January.
HSBC launched a two-year fixed rate deal at just 1.19 per cent, the lowest rate financial information group Moneyfacts has ever recorded.
Other lenders have also slashed their prices in recent weeks, with five lenders now offering two-year deals for less than 1.4 per cent.
The competition in the market has seen the average cost of a two-year fixed rate deal continue to fall, dropping to 3.27 per cent, down from 3.32 per cent at the start of the year.
Five-year fixed rate loans have also got cheaper, dropping to an average of 3.37 per cent, compared with 3.8 per cent at the beginning of January.
Charlotte Nelson, of Moneyfacts.co.uk,
said: “We are seeing lenders outbidding each other to be the lowest
possible deal on the market to grab the headlines.
“This competition in the mortgage market is unlikely to end anytime soon as lenders look to retain their customer base, and with significant Funding for Lending money still to be used it is likely headline rates will remain low.
“Many lenders are preparing for the eventuality of a Bank Rate rise and looking to gain new customers now in a hope to recoup any losses that will occur later on.”
HSBC currently has the lowest two-year fixed rate deal on offer at 1.19 per cent.
But the loan comes with a hefty £1,499 booking fee and is only available to people borrowing 60 per cent or less of their home’s value.
Chelsea Building Society, Yorkshire Building Society, the Post Office and Norwich & Peterborough Building Society all also have two-year fixed rate loans at less than 1.4 per cent.
But the deals come with fees of up to £1,999, and once these are factored in, the best buy rate is actually 1.64 per cent from Yorkshire Building Society with a fee of £475.
For people borrowing up to 90 per cent of their home’s value, Clydesdale Bank has the leading rate of 2.89 per cent with a fee of £999.
Homeowners who want to lock into the low rates for longer, can take advantage of several five-year fixed rate deals with interest rates of less than 2.4 per cent.
Virgin Money offers the lowest rate for this term at 2.29 per cent, while Yorkshire Building Society has the best buy rate of 2.34 per cent once fees are factored in.
Nelson said: “There is no better time to fix, so borrowers sitting on their SVR or coming to end of the of their fixed rate deal should look to evaluate their options.
“However, when looking for a fixed rate mortgage customers should not just be swayed by the low headline rate.
“Instead consider the whole package including any fees which can add significantly to the overall cost of the mortgage.”
As a general rule, people with larger mortgages are better off paying a higher fee to secure a lower rate, while those with smaller loans are likely to pay less overall by opting for a higher rate with a lower fee.
Read full story here
“This competition in the mortgage market is unlikely to end anytime soon as lenders look to retain their customer base, and with significant Funding for Lending money still to be used it is likely headline rates will remain low.
“Many lenders are preparing for the eventuality of a Bank Rate rise and looking to gain new customers now in a hope to recoup any losses that will occur later on.”
HSBC currently has the lowest two-year fixed rate deal on offer at 1.19 per cent.
But the loan comes with a hefty £1,499 booking fee and is only available to people borrowing 60 per cent or less of their home’s value.
Chelsea Building Society, Yorkshire Building Society, the Post Office and Norwich & Peterborough Building Society all also have two-year fixed rate loans at less than 1.4 per cent.
But the deals come with fees of up to £1,999, and once these are factored in, the best buy rate is actually 1.64 per cent from Yorkshire Building Society with a fee of £475.
For people borrowing up to 90 per cent of their home’s value, Clydesdale Bank has the leading rate of 2.89 per cent with a fee of £999.
Homeowners who want to lock into the low rates for longer, can take advantage of several five-year fixed rate deals with interest rates of less than 2.4 per cent.
Virgin Money offers the lowest rate for this term at 2.29 per cent, while Yorkshire Building Society has the best buy rate of 2.34 per cent once fees are factored in.
Nelson said: “There is no better time to fix, so borrowers sitting on their SVR or coming to end of the of their fixed rate deal should look to evaluate their options.
“However, when looking for a fixed rate mortgage customers should not just be swayed by the low headline rate.
“Instead consider the whole package including any fees which can add significantly to the overall cost of the mortgage.”
As a general rule, people with larger mortgages are better off paying a higher fee to secure a lower rate, while those with smaller loans are likely to pay less overall by opting for a higher rate with a lower fee.
Read full story here
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