Coventry launches five-year fix at 5% as more mortgage lenders improve pricing

by Aaron Strutt

Sep 15 2023

Coventry for Intermediaries has launched a leading five-year fixed mortgage priced at 5%.

Coventry's new 5% five-year fix is available to borrowers purchasing a property with a 35% deposit. The rate is locked in until 28 February 2029 and is available for loans up to and over £1 million. The rate rises by 0.22% for remortgages.

There is a £999 arrangement fee, generally a free property valuation and early repayment charges apply. Up to 10% of the balance can be repaid without charge per annum and after the fixed period, the mortgage reverts to the lender's current 7.49% standard variable rate.

Aaron Strutt, product director at Trinity Financial, says: "There have been some positive changes over the last week with Halifax lowering some rates by 0.5% and other big lenders, including HSBC, Barclays, Virgin Money and Santander, making product improvements.

"The lenders have been telling us that the cost of funding mortgages is more affordable so that they can lower their rates. Many banks and building societies have quickly raised rates recently, so it's good to see them reversing some of the price hikes."

Is your mortgage coming up for renewal soon? 

If you are coming to the end of your fixed rate, you can either stick with your bank or building society or switch to another lender. The first thing to do is understand how to avoid reverting to your lender's standard variable rate, as many are shockingly high. For many borrowers, taking a new deal with their existing lender will be the only option because affordability rules have got tighter. Still, many will have a much wider choice of providers.

Have mortgage rates peaked?

The latest market commentary from Arbuthnot Latham Private Bank says the market is pricing in a 70% probability of the Bank of England increasing rates by a further 0.25% at next week's meeting in what is likely to be a split decision. Most forecasters now expect UK rates to peak at 5.50% and stay at that level well into 2024, with much of the tightening over the past year yet to fully hit borrowers.

The hope is that even if the Bank of England pushes up the base rate mortgages will stay roughly at their current levels or continue to get more competitively priced. 

Representative example for Coventry's new 5% fixed rate:

A capital and interest mortgage of £500,999 payable over 30 years, initially on a fixed rate basis until 28 February 2029 at 5% and then on the bank's standard variable rate, currently 7.49% for the remaining 25 years, 5% would require 64 monthly repayments of £2,684.11 followed by 296 payments of £3,381.83. The total amount repayable would be £1,174,054.15 made up of the loan amount, plus interest (£672,434.66 and £999 (product fee), £125 (final repayment charge), £8 (completion fee). The overall cost for comparison is 6.7% APRC representative.  

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.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage