Mortgage borrowers have never had it so good. I’ve been proved wrong time and again since last autumn, writing that borrowers should grab the low rates while they can, only to see them drop further a month later.
I hold my hands up – I could never have predicted back in September 2012 that mortgage rates would have dropped to the low levels we are seeing today.
Now, I won’t even try to predict how low they could go. On the one hand, there literally isn’t that much further for lenders to go with rate cuts. But on the other, with over 18 months left of the Funding for Lending Scheme, the cheap funds will keep on coming for lenders, with the proviso that they must lend them out pound for pound to mortgage borrowers or small businesses.
Add in the fact that a handful of new lenders are set to launch in the coming months and the increased competition could see rates pushed down just a bit further.
But what about the stonking deals that have been launched in the last week or so?
Lowest rate ever!
Chelsea Building Society is leading the way with low rate deals, and its latest mortgage at just 1.69% fixed for two years is simply unbelievable.
On a £150,000 25-year repayment mortgage that would mean monthly repayments of just £613.
The deal comes with a fee of £1,545 and is available to those with a large 40% deposit.
Verdict: Even with the high fee this is still a great option for many borrowers. If you want to pay no fee at all there are plenty of choices available, at very low prices, starting from just 2.55% with the Post Office. But for those borrowing a larger sum and looking for short-term security, this is a great rate.
Post Office tops best buy tables
The Post Office has launched its ‘best ever mortgage range’ with some of the new deals riding high in the best buy mortgage tables.
The good news is that its best new deals are targeted at borrowers with a modest deposit. It leads the market in this space with a fee-free two-year fix at 3.19% for those with a 20% deposit and 3.49% for those with a 15% deposit.
Borrowers with 15% upfront who want longer-term security can opt for a competitive five-year fixed rate at 3.69% with a fee of £995.
And those with a slightly bigger 25% deposit can bag a seriously impressive five-year fix at 2.85%. With a modest fee of £995 (yes that is modest in today’s market) this is a very competitive deal indeed.
Verdict: This is a seriously impressive range from the Post Office, and it hits the mark for all borrowers, not just those with massive deposits.
Barclays goes long
Woolwich from Barclays has reduced some of its fixed rates including on its ten-year mortgage. This is now just 3.89% fixed for ten years and is available to those with 30% or more upfront. The £1,499 fee may look steep but when you consider that you won’t need to pay another for ten years, it’s better value than many.
But its new five-year fix at 2.99% is an absolute stonker of a deal with no fee whatsoever, available up to 60% LTV. This is only available to remortgagors as part of the lender’s Great Escape package – which comes with no fees at all.
Verdict: The ten-year deal is fantastic for those who want long-term payment security, while the five-year fix for remortgagors is a stunning rate for a totally fee-free deal.
Fancy a low fee?
For those who want to get a combination of a low interest rate and a low fee Norwich & Peterborough has just launched its lowest ever two and three-year fixed rate mortgages.
[SPOTLIGHT]The two-year fix at 1.89% comes with a standard £995 fee but the three-year deal at 2.34% has a tiny £295 fee. Both are available to those with 35% upfront.
Verdict: Good products, but it’s the three-year deal stands out because of the low fee.
Small deposit special!
This week Skipton Building Society launched a new deal aimed squarely at borrowers who don’t have the massive, or even medium-sized, deposits required to bag the headline rates.
This two-year fixed mortgage is available to those who can only muster 10% upfront and it is fee-free. The rate is 3.99%, plus borrowers get £160 cashback on completion – the £160 is relevant as it’s to celebrate Skipton’s 160th birthday.
Verdict: The rate may not seem as low as some of the other deals, but this is a truly impressive deal in its own field, for those with 10% upfront. Plus it’s fee-free.
And below are some of the best of the rest mortgages:
Large deposit
|
Lender |
Type of mortgage |
Rate |
Fee |
Max LTV |
|
Two-year fix |
1.69% |
£1,545 |
60% |
|
|
Two-year fix |
1.74% |
£1,995 |
60% |
|
|
Two-year fix |
1.79% |
£1,345 |
60% |
|
|
Two-year tracker |
2.14% |
£999 |
60% |
|
|
Three-year fix |
2.34% |
£295 |
65% |
|
|
Five-year fix |
2.49% |
£1999 |
60% |
|
|
Term tracker |
2.28% |
£1,999 |
65% |
|
|
Five-year fix |
2.49% |
£1,999 |
65% |
|
|
Two-year fix |
2.59% |
Fee-free |
60% |
|
|
Term tracker |
2.69% |
Fee-free |
60% |
|
|
Five-year fix (remortgage only) |
2.99% |
Fee-free |
60% |
|
|
Ten-year fix |
3.94% |
£995 |
60% |
Medium-sized deposit
|
Lender |
Type of mortgage |
Rate |
Fee |
Max LTV |
|
Two-year tracker |
2.24% |
£845 |
75% |
|
|
Two-year tracker |
2.24% |
£975 |
75% |
|
|
Two-year fixed |
2.24% |
£1,545 |
75% |
|
|
Three-year fix |
2.44% |
£1,545 |
75% |
|
|
Five-year fix |
2.84% |
£1,545 |
75% |
|
|
Two-year fix |
3.19% |
Fee-free |
80% |
|
|
Ten-year fix |
3.89% |
£1,499 |
70% |
Small deposit
|
Lender |
Type of mortgage |
Rate |
Fee |
Max LTV |
|
Two-year fix |
3.49% |
Fee-free |
85% |
|
|
Two-year fix |
3.59% |
£1,545 |
90% |
|
|
Two-year fix |
3.64% |
£845 |
90% |
|
|
Two-year fix |
3.99% |
Fee-free |
90% |
|
|
Term tracker |
3.99% |
£999 |
90% |
|
|
Five-year fix |
4.19% |
£1,499 |
90% |
|
|
Five-year fix |
4.20% |
Fee-free |
90% |
Use Lovemoney's innovative new mortgage tool now to find the best mortgage for you online
At Lovemoney, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free Lovemoney broker. Call 0800 804 8045 or email mortgages@lovemoney.com for more help.
This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at Lovemoney), before acting on anything contained in this article.
Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.
Your home or property may be repossessed if you do not keep up repayments on your mortgage.
More on mortgages:
Seven reasons mortgage lenders turn you down
Why borrowers are rushing to remortgage
How to pay off your mortgage early
Why a mortgage broker will always find you the best mortgage