The lowest ever ten year fixed rate mortgage deal at 2.39% is launched by the Coventry Building Society after EU referendum.
Market competition from lenders intensifies after the Coventry building Society launches the lowest ever ten year fixed rate mortgage at 2.39%.
The new mortgage deal is for borrowers that are willing to fix their mortgage rate for ten years and requires a deposit of 50% and a £999 arrangement fee.
Lower rates are good news for borrowers such as first time buyers, home movers, remortgage buyers and even buy-to-let landlords that have also seen competitive rates despite higher stamp duty tax measures to limit investors.
HSBC have also a competitive ten year fixed rate mortgage offering 2.79% and no fee and a 30% deposit.
Swap rates lower after Brexit
The pricing of fixed rate mortgages depends mostly on banks ability to access low cost money to lend to borrowers.
Banks usually fund mortgages from savers or the money markets borrowing from other banks at the swap rates for a specified period of time.
Swap rates react to expectations of future interest rates and inflation and the ten year rates plunged from 1.60% just before the EU referendum to 1.29% now.
This fall in the rates is giving lenders the opportunity to offer record low mortgage deals.
For remortgage buyers currently on their lenders standard variable rate, switching to a new mortgage deal would help them to reduce the cost of monthly repayments.
Opportunities for borrowers
The Coventry building Society has also launched a ten year fixed rate mortgage requiring a smaller 35% deposit at 2.49% and means you need a loan to value (LTV) of 65%.
This is likely to be more popular to a wider range of borrowers such as remortgage buyers or homeowners that are downsizing and have more equity.
Borrowers need to be aware that the longer terms will have early redemption penalties and these could be significant.
The equity release mortgage buyer can secure fixed rates typically from 5.8% upwards without any evidence of earnings, important for borrowers with only pension income.
The Coventry mortgage has penalties if you wanted to repay your mortgage early for the first two years equal to 5% of the mortgage balance, 3% in the next three years and 1% if redeemed thereafter.
For fixed rate mortgages the drop in the swap rates will benefit shorter terms such as two, three and five years and HSBC have a two year fixed rate at 0.99%.
For first time buyers and home movers, to manage their mortgage costs they should consider a longer term fixed rate of 3 years or 5 years.
Lower mortgage rates benefit buy-to-let investors as they can remortgage to reduce the cost of interest repayments to lenders.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.
For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle or even give to a family member.
Learn more by using the equity release calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
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