Coventry and Halifax latest mortgage lenders to offer sub-4% five-year fixes

by Aaron Strutt

Aug 14 2024

Coventry for Intermediaries has become the latest lender to offer a sub-4% mortgage as it lowered its rates by up to 0.52% today.

The building society has launched a 3.9% five-year fixed rate for those purchasing a property with a 35% deposit. It has a £999 fee and a free property valuation. The lender also lowered many of its other residential and buy-to-let fixes. The new Halifax five-year fixed rate is marginally higher.

In the past week, Halifax for Intermediaries, NatWest, HSBC and Barclays for Intermediaries have all launched sub-4% deals, joining Nationwide Building Society, which was the first to do so.

Barclays now offers the lowest rate, just over 3.80%, for borrowers with a 40% deposit. There is a £899 fee, and the rate is marginally cheaper for Barclays Premier customers.

Aaron Strutt, product director at Trinity Financial, says, "It is good news that the lenders have been so busy lowering rates. It seems like the Bank of England base rate cut has helped.

"The gap between the cheapest deals for first-time buyers has closed with all of these rate cuts, but this is mainly in the five-year fix market.

"The price reductions have not been as large for those keen to opt for a two, three, or ten-year fix. Lenders seem to be trying to make five-year fixes their benchmark deals, although they may not be suitable for everyone."

Different mortgage rates depending on borrower type

One of the significant issues in the mortgage market is how banks and building societies have so many rates now, which are priced depending on the borrower type.

For example, there are separate property purchase and remortgage rates, sometimes different deals for first-time buyers, plus different rates for existing customers doing product transfers. The rates then change depending on the size of the deposit, credit score, and the fixed or tracker rate period.

Coventry rate representative example: A capital and interest mortgage of £400,000 payable over 35 years, initially on a fixed rate basis at 3.90% and then on the lender's 7.49% standard variable rate for the remaining 30 years. The 3.90% rate would require 65 monthly repayments of £1,885.11 followed by 295 payments of £2,653.52. The total amount repayable would be £906,569.98 made up of the loan amount, plus interest (£508,135.66) and £999 (product fee), £125 (final repayment charge), £8 (completion fee). The overall cost for comparison is 6.2% APRC representative.

Which lenders offer sub-4% five-year fixed-rate mortgages?

It has been an eventful week in the mortgage industry. Santander and Virgin Money are two of the largest banks that have not yet reduced their five-year fixes below 4%.

Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation

The information contained within was correct at the time of publication but is subject to change.

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