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 |
|
60% |
0.99% |
£1,495 |
2% in first year, then 1% until the end of fixed period. |
|
|
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. |
|
80% |
1.29% |
£995 |
2% in first year, then 1% until the end of fixed period. |
|
|
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. |
|
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, |
|
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 |
|
50% |
2.39% |
£999 |
5%, 5%, 3%, 3%, 3%, 1%, 1%, 1%, 1%, then 1% until end of fixed period. |
|
|
60% |
2.49% |
£999 |
5% until end of fixed period. |
|
|
65% |
2.49% |
£999 |
5%, 5%, 3%, 3%, 3%, 1%, 1%, 1%, 1%, then 1% until end of fixed period. |
|
|
70% |
2.59% |
£995 |
5% until end of fixed period. |
|
|
75% |
2.64% |
£0 |
3% in year 1 then 2% until end of fixed period. |
|
|
80% |
2.69% |
£1,209 |
5% until end of fixed period. |
|
|
85% |
3.63% |
£400 |
5% for year 1, 4% for year 2, 3% for year 3 and 4, 1% for year 5. |
|
|
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 |
|
60% |
2.49% |
£0 |
3% in year 1 then 2% until end of fixed period |
|
|
65% |
2.49% |
£999 |
5%, 5%, 3%, 3%, 3%, 1%, 1%, 1%, 1%, then 1% until end of fixed period. |
|
|
70% |
2.64% |
£0 |
3% in year 1 then 2% until end of fixed period |
|
|
75% |
2.64% |
£0 |
3% in year 1 then 2% until end of fixed period |
|
|
80% |
2.89% |
£0 |
3% in year 1 then 2% until end of fixed period |
|
|
85% |
3.74% |
£230 |
7% for four years, then 6%, 5%, 4%, 3%, 2% and 1% until end of fixed period. |
|
|
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
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