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| Average fixed-rate mortgages at record lows | Average fixed-rate mortgages at record lows |
| (about 17 hours later) | |
| Borrowers are now able to take advantage of record low mortgage rates, with the average cost of a five-year deal falling below 4% for the first time. | Borrowers are now able to take advantage of record low mortgage rates, with the average cost of a five-year deal falling below 4% for the first time. |
| The average five-year fix fell to 3.96% in May, down from 4.86% in the same month in 2012, according to the Mortgage Advice Bureau. It added that the rates on two-year fixes have fallen to the lowest level since it began collecting data in 2007, from an average of 4.66% to 3.82% over the 12 months to May. | The average five-year fix fell to 3.96% in May, down from 4.86% in the same month in 2012, according to the Mortgage Advice Bureau. It added that the rates on two-year fixes have fallen to the lowest level since it began collecting data in 2007, from an average of 4.66% to 3.82% over the 12 months to May. |
| David Hollingworth from mortgage broker London & Country said: "Fixed rates continue to fall as lenders look to leapfrog their competitors to claim the lowest rate on the market." | David Hollingworth from mortgage broker London & Country said: "Fixed rates continue to fall as lenders look to leapfrog their competitors to claim the lowest rate on the market." |
| For example, Yorkshire building society today cut its five-year fix to 2.44%, available up to 65% loan-to-value (LTV) with a £1,475 fee, while Woolwich recently targeted remortgage customers with a five-year fix at 2.99%, available at up to 60% LTV with no fee, free valuation and legal work, plus £250 cashback. | For example, Yorkshire building society today cut its five-year fix to 2.44%, available up to 65% loan-to-value (LTV) with a £1,475 fee, while Woolwich recently targeted remortgage customers with a five-year fix at 2.99%, available at up to 60% LTV with no fee, free valuation and legal work, plus £250 cashback. |
| "Although the very lowest rates still carry big fees that borrowers should be sure to factor in, there are also options with little or no fees," Hollingworth said. "However, swap rates have been edging up in recent months so it is not a given that rates will keep on falling." | "Although the very lowest rates still carry big fees that borrowers should be sure to factor in, there are also options with little or no fees," Hollingworth said. "However, swap rates have been edging up in recent months so it is not a given that rates will keep on falling." |
| Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Fixed rates look incredibly good value at the moment – particularly five-year deals. The markets think it highly unlikely that interest rates will rise in the next two years, so a two-year fix has limited value, while many borrowers are suspicious of long-term fixes of 10 years, because it is a long time to commit. | Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Fixed rates look incredibly good value at the moment – particularly five-year deals. The markets think it highly unlikely that interest rates will rise in the next two years, so a two-year fix has limited value, while many borrowers are suspicious of long-term fixes of 10 years, because it is a long time to commit. |
| "A five-year fix, on the other hand, gives protection from rate rises over the medium term, and with such cheap pricing provides good value for borrowers." | "A five-year fix, on the other hand, gives protection from rate rises over the medium term, and with such cheap pricing provides good value for borrowers." |
| Other providers offering attractive five-year fixed rates include Halifax, with a rate of 2.45% and a £1,995 fee, while Tesco Bank has one at 2.49% with a £1,495 fee – although both are only available up to 60% LTV. | Other providers offering attractive five-year fixed rates include Halifax, with a rate of 2.45% and a £1,995 fee, while Tesco Bank has one at 2.49% with a £1,495 fee – although both are only available up to 60% LTV. |
| Nine out of 10 borrowers now choose fixed-rate deals for the security of set monthly repayments, compared to 76% a year ago. These deals are currently better value than variable rate options and no longer include a premium for the additional security. | Nine out of 10 borrowers now choose fixed-rate deals for the security of set monthly repayments, compared to 76% a year ago. These deals are currently better value than variable rate options and no longer include a premium for the additional security. |
| Top mortgages | Top mortgages |
| Chelsea Building Society | Chelsea Building Society |
| HSBC | |
| HSBC | HSBC |
| Provided by London & Country for the Guardian | Provided by London & Country for the Guardian |