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The best residential mortgage rates this week 18.09.20
Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 18/09/2020


Lenders continued to increase rates and withdraw mortgage products this week. Newcastle Building Society, West Brom Building Society, the Post Office, Coventry Building Society and Marsden Building Society all withdrew mortgage products this week. While Leek Building Society, Santander, Coventry Building Society, Principality Building Society, HSBC, Skipton Building Society and Nottinghamshire Building Society increased rates on selected mortgages. Only the Halifax, Stafford Railway Building Society and Leek Building Society introduced new mortgage products this week.


First-time buyers at 90% LTV and above now have very limited choices for a mortgage. Nationally Nationwide Building Society and Virgin Money still have 90% LTV mortgages available but there are conditions to these. First time buyers that cannot meet these will find they need a family member willing to offer their assets as security or face the post code lottery of local building societies that have restricted first-time lending to their localities only.

We have set out below the best mortgage rates for those wanting to remortgage, move home and for first-time buyers. We list the best mortgage deals available directly from the lender that are available across Great Britain. All the rates shown are for those mortgages available at 60% LTV unless otherwise stated.

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Mortgage rates continue to rise: here are the most competitive rates available today

Homeowners looking to lock into a fixed rate mortgage deal are being urged to act quickly as the rates on fixed deals have risen sharply in the last month.

In fact, during August the average two year fixed rate rose by 0.16%, from 2.08% on 1 August to 2.24% on 1 September, its largest increase since July 2009. Meanwhile, the average rate on five year fixed deals increased by 0.15%, from 2.34% on 1 August to 2.49% on 1 September – its biggest rise since March 2011. As the below chart shows, average fixed rates have been rising since July, when they reached historic lows of 1.99% on two year fixed deals and 2.25% on five year fixed deals.

 

Fixed mortgage rate analysis
  March 2020 April 2020 May 2020 June 2020 July 2020 August 2020 September 2020
Average two-year fixed rate (all products and LTVs) 2.43% 2.36% 2.09% 2.02% 1.99% 2.08% 2.24%
Average five-year fixed rate (all products and LTVs) 2.74% 2.66% 2.35% 2.26% 2.25% 2.34% 2.49%

Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Treasury Report

 

Commenting on the rate rises, Eleanor Williams, finance expert at Moneyfacts.co.uk, said: “While these rates are still some 0.19% and 0.25% lower than prior to lockdown, the level of increases seem to have gathered pace, doubling over the last two months. If these were to carry on their current trajectory, within the next couple of months, consumers could face average rates in excess of those available prior to the onset of the pandemic.”

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The best residential mortgage rates this week 11.09.20

Mortgage rates saw some further changes this week as some lenders pulled or increased their rates. Leeds Building Society increased their mortgage rates this week and Platform, a part of the Co-operative Bank withdrew some of their fixed rate mortgages.


The best mortgage rates are shown below for those wanting to remortgage, move home and for first-time buyers. Our tables list the best deals available directly from the lender that are available across Great Britain. All the rates shown are for those mortgages available at 60% LTV unless otherwise stated.

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Best options when saving for a house deposit

The latest Nationwide House Price Index found that during August, the average house price had risen to £224,123, up by 2.0% from the previous month. This, combined with lenders withdrawing high loan-to-value (LTV) mortgage deals from the market as well as historic low saving rates, has made it even more challenging for first-time buyers to save the deposit needed for their first home.

Although the property market could start to slow towards the end of this year and into 2021, when the economic impact of the pandemic becomes clearer, first-time buyers are still having to save hefty deposits in order to buy their first home. In fact, the current average deposit needed to buy a first home is £47,059, which is a 25% increase from 10 years ago when the average was £37,761.

Many first-time buyers have resorted to getting help from parents to boost the deposit they need to buy their first home. But, as lenders have become increasingly reluctant to lend to first-time buyers, relying on parents for deposits is not always an option. For example, last month Nationwide stated that to get a 90% LTV deal, first-time buyers had to prove they had saved 75% of the deposit themselves.

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Mortgage approvals now at pre-lockdown levels

Those wanting to take advantage of the current stamp duty holiday to buy a new home or a buy-to-let investment will find that the number of mortgages approved is now back to levels seen before the Coronavirus lockdown. Data from the Bank of England shows that the number of house purchase mortgages approved in July 2020 was 66,281 an increase of 66% on the approvals in June 2020 and only 1% behind July 2019. However, those needing a mortgage at 90% loan-to-value (LTV) or above will struggle, as lenders have pulled many of the mortgages available at this tier and increased rates.

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Recent News

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The best buy-to-let mortgage rates 04.09.20

4th September 2020

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The best residential mortgage rates this week 04.09.20

4th September 2020

This week has seen some changes in the top mortgage rates available, as HSBC pulled its 90% loan-to-value (LTV) mortgages and increased rates across its fixed rate mortgage range.

This week has seen some changes in the top mortgage rates available, as HSBC pulled its 90% loan-to-value (LTV) mortgages and increased rates across its fixed r

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Equity release rates are now lower than at the start of 2020

3rd September 2020

The average rate for equity release dropped to 4.21% on 3 September 2020, only fractionally above the lowest ever average rate seen since 2007, at 4.13% in March 2020. Those wanting to release cash tax-free from their home to help fund retirement or for home improvements can now do so at competitive rates.

The average rate for equity release dropped to 4.21% on 3 September 2020, only fractionally above the lowest ever average rate seen since 2007, at 4.13% in Marc

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What to do if your payment holiday is coming to an end

1st September 2020

The start of September will have many thinking about how to manage their finances as payment holidays on overdrafts, mortgages and credit cards will soon come to end.

The start of September will have many thinking about how to manage their finances as payment holidays on overdrafts, mortgages and credit cards will soon come t

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Mortgage rates continue to rise: here are the most competitive rates available today

14th September 2020

Homeowners looking to lock into a fixed rate mortgage deal are being urged to act quickly as the rates on fixed deals have risen sharply in the last month

Homeowners looking to lock into a fixed rate mortgage deal are being urged to act quickly as the rates on fixed deals have risen sharply in the last month

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The best residential mortgage rates this week 11.09.20

11th September 2020

Mortgage rates saw some further changes this week as some lenders pulled or increased their rates. Leeds Building Society increased their mortgage rates this week and Platform, a part of the Co-operative Bank withdrew some of their fixed rate mortgages.

Mortgage rates saw some further changes this week as some lenders pulled or increased their rates. Leeds Building Society increased their mortgage rates this we

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The housing market is experiencing a mini-boom as a result of pent-up demand post-lockdown and the new stamp duty payment holiday. Rightmove reported a 75% increase of buyer enquiries in July 2020 compared to July 2019 and 44% of sellers that listed from 13 May 2020 have now been marked as sale agreed.

The housing market is experiencing a mini-boom as a result of pent-up demand post-lockdown and the new stamp duty payment holiday. Rightmove reported a 75% incr

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Two and five year mortgage rates hit historic lows

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Although the number of mortgage deals have almost halved since March, the average mortgage rates on two and five-year fixed deals have hit historic lows

Although the number of mortgage deals have almost halved since March, the average mortgage rates on two and five-year fixed deals have hit historic lows

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