Mortgage lenders are making record margins on fixed-rate loans. Research compiled by Moneyfacts found the highest ever difference of 3.14 percentage points between the rate on the average two-year fixed-rate mortgage (5.18pc) and the two-year "swap" or wholesale rate (2.04pc).
Further research has shown reductions in the availability of fixed-rate mortgages and a fall in the average loan to value (indicating a need for larger deposits), which may leave borrowers feeling dejected, although there are still some products that may suit their needs. Here is a selection of the best.
Two-Year Fixed-rate mortgage – NatWest Mortgage Services
NatWest’s two-year fixed deal has a rate of 3.69pc until October 31 2011. Borrowers must pay a booking fee of £799. Borrowers need a deposit of at least 25pc and the minimum advance is £25,000. Overpayments can be made by either lump sum or regular payment, with the option to reduce existing capital by up to 10pc. This deal is available to home movers only – not to first-time buyers.
Three-Year Fixed-rate mortgage – First Direct
With a rate of 4.24pc, this deal is currently top of the three-year fixed mortgage tree. Customers can borrow up to 60pc of the property value and must pay a booking fee of £499, along with a £499 arrangement fee. There are, however, a plethora of flexible features, including underpayments, overpayments and payment holidays. Borrowers can also offset their savings against their mortgage, so must open or already have a First Direct current account.
Five-Year Fixed-rate mortgage – Co-Operative Bank
This deal offers a rate of 4.99pc until September 30 2014. The maximum loan to value for remortgage and homeowner customers is 75pc, while advances range from £25,000 up to £1m. Borrowers must pay an arrangement fee of £995. Customers looking for flexible features will be pleased to see that this product offers overpayments, underpayments and payment holidays.
Variable-rate mortgage – HSBC
This product currently charges a rate of 2.95pc, but the rate moves in line with Bank Rate (now 0.5pc) – you will pay Bank Rate plus 2.45 percentage points. Customers can borrow up to 75pc of the property value for both remortgages and home moves. A booking fee of £799 is payable. There is the option to make overpayments by either lumps sums or regular payment.
- Source: moneyfacts.co.uk
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