Barclays, NatWest and Nationwide improve mortgage rates again: Lowest two-year fix hits 3.89%
Banks and building societies have improved their mortgages again over the last few days as competition to offer the lowest rates intensifies.
NatWest, Barclays, Nationwide for Intermediaries, and Halifax are some of the biggest lenders that have announced they are offering cheaper mortgage rates.
Nationwide has just launched a 3.89% two-year fix that undercuts Santander’s sub-4% two-year fix. These rates are currently some of the only sub-4% two-year fixes available to new customers. The 3.89% rate has a £1,499 fee, and borrowers will need a 40% deposit to qualify. It is available for mortgages between £300,000 and £5 million.
What has happened to three-year and five-year fixed rate mortgages?
Three-year fixes are getting cheaper with Barclays, MPowered Mortgages, Santander, and Nationwide all offering sub-4% rates, mainly for borrowers with 40% deposits.
Barclays has just launched a 3.70% five-year fixed rate for higher earners with a 40% deposit and it has an £899 fee. This undercuts NatWest’s and Nationwide’s new five-year fixes priced just below 3.75%. Both of these mortgages are available to borrowers purchasing a property, providing they have a 40% deposit and arrangement fees priced just below £1,500.
Aaron Strutt, product director at Trinity Financial, says: "If you are looking for a mortgage at the moment, there is a good choice of rates. The lenders are pushing to offer better mortgages to try and increase their lending volumes.
"Nationwide's announcement that it is going to offer up to six times the salary to some first-time buyers is likely to mean more lenders will ease their acceptance criteria."
Representative example: A capital and interest mortgage of £400,000 payable over 30 years, initially on a fixed rate basis at 3.89% until 02/02/2027 and then on the lender's 7.74% standard variable rate for the remaining 33 years. The 3.89% rate would require 24 monthly repayments of £1,884.38 followed by 336 payments of £2,809.47. The total amount repayable would be £990,786.04 made up of the loan amount, plus interest (£589,208.06) and £1,499 (product fee), £65 (final repayment charge), £15 (completion fee). The overall cost for comparison is 7.3% APRC representative.
Representative example: A capital and interest mortgage of £400,000 payable over 30 years, initially on a fixed rate basis at 3.70% until 31/12/2029 and then on the lender's 6.99% standard variable rate for the remaining 30 years. The 3.70% rate would require 62 monthly repayments of £1,841.13 followed by 298 payments of £2,538.12. The total amount repayable would be £871,649.82, made up of the loan amount, plus interest (£470,510.24) and £899 (product fee), £80 (final repayment charge), £35 (completion fee). The overall cost for comparison is 5.9% APRC representative.
Call Trinity Financial on 020 7016 0790 to secure a mortgage, book a consultation, or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
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