Atom Bank is offering the cheapest ever five-year fixed rate mortgage, going for a tiny 1.29%

This is the same rate as the online bank's two-year fixed offering, but is likely to only be available for a short period of time. So if Atom Bank have piqued your interest, you'll need to apply sooner rather than later. 

Why go for a fixed-rate mortgage?

Fixed-rate mortgages are very popular, and it’s easy to understand why.

They provide you with certainty – you know that for the length of your fixed-rate period, your repayments will remain exactly the same each month, no matter what the Bank of England does with the Base Rate.

However, knowing that you want to fix your mortgage rate is only half the decision. You need to work out how long you want to fix for too.

Two-year fixed rate mortgages are the cheapest, but you only have certainty about your mortgage payments for a short period of time.

If you want the added security of a five-year fixed-rate, you’ll pay a premium in the form of a higher interest rate.

Long-term fixed rates also come with much higher Early Repayment Charges, so you might need to take that into account too.

Top two-year fixed-rate mortgages

First, let’s look at the two-year fixed rate mortgages with the lowest rates around. Be warned, nabbing a tiny interest rate usually means you’ll have a stump up a hefty product fee.

Lender

LTV

Rate

Fee

ERCs

Yorkshire Building Society

60%

0.99%

£1,495

2% in first year, then 1% until the end of fixed period.

Chelsea Building Society

65%

1.17%

£1,695

2% in first year, then 1% until the end of fixed period.

HSBC

70%

1.14%

£749

2% in first year, then 1% until the end of fixed period.

Yorkshire Building Society

75%

1.24%

£1,495

2% in first year, then 1% until the end of fixed period.

HSBC

80%

1.29%

£995

2% in first year, then 1% until the end of fixed period.

First Direct

85%

1.44%

£1,450

3% in first year, then 2% until the end of fixed period.

Monmouthshire Building Society

90%

1.65%

£995

3% until the end of fixed period.

The Nottingham Building Society

95%

2.99%

£999

2% in first year, then 1% until the end of fixed period.

As you can see, the rates on the top deals tend to command a big fee. So we’ve also picked out the best rates on two-years deals with a fee of under £500.

Lender

LTV

Rate

Fee

ERCs

Halifax

60%

1.39%

£295

3% in first year, then 2% until the end of fixed period.

Norwich & Peterborough Building Society

65%

1.44%

£195

2% in first year, then 1% until the end of fixed period.

Accord Mortgages

70%

1.47%

£495

2% in first year, then 1% until the end of fixed period.

Accord Mortgages

75%

1.47%

£495

2% in first year, then 1% until the end of fixed period.

Accord Mortgages

 

80%

1.56%

£495

2% in first year, then 1% until the end of fixed period.

Post Office Money

85%

1.77%

£495

3% in first year, then 2% until the end of fixed period.

Loughborough Building Society

90%

2.19%

£0

2% until the end of fixed period.

Monmouthshire Building Society

95%

3.25%

£0

3% until the end of fixed period.

Five-year fixed-rate mortgages

If you want to go for a longer-term fixed rate deal, then you may prefer a five-year fixed rate deal.

While you enjoy that security for longer, you may have to pay a premium in terms of a higher rate. You also have significant Early Repayment Charges to consider should you wish to leave the deal early.

Lender

LTV

Interest rate

Product fees

ERCs

Atom Bank

60%

1.29%

£900

ERCs vary

Yorkshire Building Society

65%

1.77%

£1,495

4% until 2019,
then
3% until 2020,
then
2% until 2021,
then
1% until 2022

HSBC

70%

1.94%

£749

5% of the amount redeemed until 2018

4% of the amount redeemed until 2019

3% of the amount redeemed until 2020

2% of the amount redeemed until 2021

1% of the amount redeemed until 2022

Atom Bank

75%

1.34%

£900

ERCs vary

Atom Bank

80%

1.49%

£900

ERCs vary

Atom Bank

85%

1.59%

£900

ERCs vary

Atom Bank

90%

1.99%

£900

ERCs vary

And now let’s take a look at the best deals with a fee of under £500.

Lender

LTV

Interest rate

Product fees

ERCs

Atom Bank

60%

1.64%

£0

ERCs vary

Virgin Money

65%

2.10%

£0

4% until end of fixed period

Post Office Money

70%

2.18%

£495

4% of the amount redeemed until 2019

3% of the amount redeemed until 2021

2% of the amount redeemed until 2022

First Direct 

75%

1.74%

£0

3% for the first year then 2% until the end of the fixed period

Atom Bank

80%

1.89%

£0

ERCs vary

Atom Bank

85%

1.99%

£0

ERCs vary

Atom Bank

90%

2.44%

£0

ERCs vary

Ten-year fixed-rate mortgages

A ten-year fixed rate can offer long-term piece of mind and the market is booming.

Again the longer security means a higher rate and significant ERCs to consider should you wish to leave the deal early.

Here are the top rates at the moment.

Lender

LTV

Interest rate

Product fees

ERCs

Coventry Building Society

50%

2.39%

£999

5%, 5%, 3%, 3%, 3%, 1%, 1%, 1%, 1%, then 1% until end of fixed period.

Barclays

60%

2.49%

£999

5% until end of fixed period.

Coventry Building Society

65%

2.49%

£999

5%, 5%, 3%, 3%, 3%, 1%, 1%, 1%, 1%, then 1% until end of fixed period.

Barclays

70%

2.59%

£995

5% until end of fixed period.

First Direct

75%

2.64%

£0

3% in year 1 then 2% until end of fixed period.

Barclays

80%

2.69%

£1,209

5% until end of fixed period.

TSB

85%

3.63%

£400

5% for year 1, 4% for year 2, 3% for year 3 and 4, 1% for year 5.

Nationwide

90%

3.89%

£1,229

7% for four years, then 6%, 5%, 4%, 3%, 2% and 1% until end of fixed period

As you can see, although these best buy deals offer eye-catchingly low rates, many also carry hefty fees. So here are the best 10-year fixed-rate deals with fees under £500.

Lender

LTV

Interest rate

Product fees

ERCs

First Direct

60%

2.49%

£0

3% in year 1 then 2% until end of fixed period

Coventry Building Society

65%

2.49%

£999

5%, 5%, 3%, 3%, 3%, 1%, 1%, 1%, 1%, then 1% until end of fixed period.

First Direct

70%

2.64%

£0

3% in year 1 then 2% until end of fixed period

First Direct

75%

2.64%

£0

3% in year 1 then 2% until end of fixed period

First Direct

80%

2.89%

£0

3% in year 1 then 2% until end of fixed period

Nationwide

85%

3.74%

£230

7% for four years, then 6%, 5%, 4%, 3%, 2% and 1% until end of fixed period.

Nationwide

90%

3.99%

£0

7% for four years, then 6%, 5%, 4%, 3%, 2% and 1% until end of fixed period

This loveMONEY article is regularly updated