Nationwide Launches Cheapest Five Year Fixed Rate Mortgage Ever

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Nationwide raised the temperature in the war on mortgage rates by granting the UK’s lowest five-year fixed-rate mortgage with an interest rate of 0.99%.

The building society proposal is the first recorded five-year transaction to charge borrowers an interest rate of less than 1% during a fixed interest rate period. The mortgage is available from Wednesday for those with a deposit of at least 40 percent and comes with a commission of £ 1,499.

A number of lenders have offered rates below 1% for two-year fixes in recent weeks, but historically there has been a big difference between these rates and the long-term fixes. Since the competition reinforced after the resumption of the housing market after the lockdown, these rates have as to go down as well as narrowed

Nationwide also tops the “Best Buy” lists with its latest two-year market fix of 0.91% with a £ 1,499 commission and a maximum loan-to-cost ratio of 60%.

Mark Harris, CEO of mortgage broker SPF Private Clients, said: “With Nationwide also offering a two-year fix at 0.91%, the construction company has made a double attempt with the cheapest two- and five-year fixes on the market. Since lenders are cash-rich and eager to do business, we will not bet against others who will follow suit and offer similarly cheap products in the coming weeks. ”

Aaron Strutt, director of products for mortgage broker Trinity Financial, said lenders had access to financing at such low prices that they could still offer record low rates and continue to make money.

“Many borrowers [have] selection of sub-1% fixes for two, three and five years. With so many lenders offering only interest rates at around 1%, there are some very cheap options. ” Prices are likely to get even cheaper, he said.

Moneyfacts, a financial website that has tracked rates since 2007, reported that Nationwide has “stepped up the war on mortgage rates” by setting a record five-year rate available to anyone looking to borrow between £ 275,000 and £ 1 million.

“This came just weeks after we witnessed HSBC cut its own five-year fixed rates, which includes a low rate deal at 1.06%, which is the leading rate in the market,” said Rachel Springall. , financial expert at Moneyfacts.

However, she cautioned that borrowers need to look beyond the general rate when deciding which loan is right for them, as factors such as commission and mortgage size also affect the choice.

“Whether the lowest fixed rate in the market is the most appropriate choice will depend on the size of the loan and individual circumstances, so it is important that borrowers weigh the total true value of the transaction before they commit,” she said.

Events in the real estate market continued to grow despite the gradual withdrawal weekend stamp duty on purchases in England and Northern Ireland from June 30th.

Chris Sykes, associate director of mortgage broker Private Finance, said his firm currently has a large number of clients looking for housing, but the lack of supply means that “when good properties come in, they last a week and then sell them.”

“The same driving factors, like increased space both inside and out, remain incredibly relevant as people adapt in the long term to changes in their work lives,” he said.



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