Fixed rate mortgages are cut to 0.99% for borrowers with large deposits looking to remortgage as competition increases from lenders.

Homeowners can reduce the most of their mortgage as lenders TSB and Hinckley & Rugby Building Society launch 0.99% fixed rate mortgages for 60% loan to values (LTV), according to Moneyfacts.

The product from TSB is for remortgage buyers offering a 0.99% rate with a 60% LTV on two-year fixed mortgage and a hefty product fee of £1,495.

See how much your payments would be if you remortgage your property to a lower interest rate at this link:
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Hinckley & Rugby Building Society is offering a 0.99% rate for a minimum loan of £100,000 with 65% LTV on a two-year discounted variable and £699 product fee.

Lower costs of 0.99% mortgages

With the lower rate of 0.99% the mortgage repayments will reduce and for a property valued at £350,000 remortgaging a 60% LTV on a 20-year term the monthly cost is £964.84.

For comparison a mortgage with fixed rate of 1.33% has monthly costs of £997.01 or £32.17 more per month and over a two-year term costs an extra £772.08.

The following table from moneyfacts shows the best mortgage rates for different terms and the product fees.

Lender	Rate	Product fee	Term
TSB	0.99%	£1,495	2-years
Hinckley & Rugby	0.99%	£699	2-years
Coventry	1.39%	£999	3-years
Santander	1.19%	£1,249	5-years
TSB	1.19%	£1,495	5-years
Nationwide	1.19%	£1,499	5-years

All the above mortgages are fixed rates except for Hinckley & Rugby which is a discounted variable rate which can go up and down with the Bank of England base rates.

Even the five year fixed rates are competitive with Santander, TSB and Nationwide offering rates of 1.19% which is the cheapest in the last fourteen years.

The Santander offer of 1.19% fixed for 5-years is based on a 70% LTV for a minimum loan of £350,000 with a product charge of £1,249 and includes a free valuation of up to £1,190 as well as no legal fees or £250 cashback on completion.

For home movers the best rates are from Halifax at 1.04% fixed for 2-years and based on 60% LTV for a minimum loan of £250,000 with a product charge of £1,495 and includes £250 cashback and free valuation.

Homeowners need to consider the high product cost for these mortgages with low rates as this could mean you are better off with a higher rate and lower product fee for your mortgage and term.

First time buyers pay more interest

The competitive rates between 0.99% and 1.19% for remortgaging and moving home apply if you have a large amount of equity and borrowing large amounts.

For first time buyers the deposits are smaller and higher loan to values mean interest rates are much higher.

The best first time buyer mortgage for a 90% LTV is from Halifax offering 2.88% fixed for 2-years and product fee of £995.

For a 5-year fixed mortgage the best offer is 3.28% fixed rate from Clydesdale Bank for a 90% LTV on a minimum loan of £80,000 and expensive product fee of £1,999.

Family members can help first time buyers where equity release buyers access lump sum cash upfront using a lifetime mortgage and gifting the deposit to children and grandchildren.

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. Learn more by using the property value tracker chart and equity release calculator.
Start your free remortgage quote and we can find the best mortgages and lowest rates for your home at this link:
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For older homeowners, to release equity from your property for home and garden improvements or gift to a family member, we can recommend lifetime mortgages so begin your equity release quote for the latest provider offers.