Santander this week reduced the cost of its new fixed-rate and tracker mortgages and launched a two-year fix where you pay 2.99%, provided you are borrowing no more than 60% of your home’s value.
That is well below the average two-year fixed-rate offered by the main high street banks and building societies – which has crept up slightly to 3.28% – but there are cheaper deals available. For example, the Yorkshire Building Society and HSBC both offer two-year fixes priced at 2.89%, where the maximum loan is 75% and 60% respectively. The Yorkshire also features one at 2.69%, though the fee in this case is a hefty £1,495 and the maximum loan is 60%.
For many, deals that track the Bank of England base rate will look a better bet, bearing in mind that many experts believe interest rates are likely to stay on hold until at least the end of next year. The monetary policy committee this week kept rates at 0.5% – a level they have been at since March 2009.
The average two-year tracker rate available on the high street has come down to 2.92%, says Moneysupermarket.com. Borrowers looking to take advantage of the current low base rate may be tempted by a new tracker deal from HSBC. It is offering a rate of 1.79% above base rate (just 2.29% currently) for the term of the mortgage, which is available to borrowers with a 40% deposit.
The deal is subject to a £99 fee, and is the lowest-rate term tracker deal on the market, says Moneyfacts. There is no exit penalty, so borrowers can quit the deal at any time.
As ever, rates are much less attractive for those who are unable to stump up big deposits and/or unwilling to pay big fees. While Santander has two-year fixes at under 3%, you pay 4.15% if you want one with a 75% LTV (loan-to-value) and a small fee (£99).
Madison Oakley are an independent estate agent and letting agent in Bath. We are a small director led firm with over 50 years combined local experience.To find out more about us, do visit our website. We would always be delighted to receive comments via our blog or do feel free to call us on 01225 466525.