Earlier this month Property Advice Blog reported that mortgage rates reached their lowest rates for 23 years. This trend has continued with the announcement of the lowest ever fixed-year fixed rate mortgage in the UK. This bargain-mortgage has been introduced to the market by Chelsea Building Society, and with an increasingly competitive market other mortgage lenders may follow suit.
What is the cheapest mortgage deal ever?
Chelsea Building Society has introduced to market a five-year fixed rate mortgage at a rate of 3.39 per cent. This is the cheapest fixed-rate mortgage deal ever on the UK market. In order to take advantage of this record-low mortgage rate, borrowers need a 30% deposit for the property and 1,495 for the arrangement fee.
Are other mortgage lenders dropping their rates?
Yes; it’s not just Chelsea Building Society that is offering attractive fixed-rate mortgage deals, last week Yorkshire Building Society cut the interest rate of its five year fixed mortgage to 3.49% with an arrangement fee of 995 and a minimum deposit of 25%. Similarly nine building societies now offer five-year fixed-rates under 4% including First Direct, Nationwide, Woolwich and Northern rock. Fixed rate mortgages for two-years are also facing a stark drop in price with Woolwich offering a two-year fixed mortgage at 2.54% (or 2.49% in its loyalty range for existing customers) and Skipton Building Society introducing a 2.48% two-year fixed rate mortgage he said .
Why are the rates of mortgages decreasing?
The interest rates of mortgages are decreasing because of greater competition and a drop in the rate that banks lend and swap money to one another. In order to remain competitive and reach their sales targets banks and building societies are offering record-low rates to attract customers.