Mortgage rates start to rise but sub-1% deals still available

Lenders have started increasing rates on mortgage deals, but homeowners looking to lock into a sub-1% rate will still find deals available. Borrowers looking for the most competitive mortgage rates are being urged to act quickly however, as it is unlikely that the lowest rates will remain for much longer.

With the Bank of England due to make a base rate announcement this week, which some expect will result in a base rate rise, some of the largest mortgage lenders have been anticipating that borrowing will start to become more expensive, and have been increasing mortgage rates as a result.

For example, last week Santander increased the rates on selected two and five year fixed rate deals. As well as this, over the past week Halifax, Lloyds Bank and HSBC have all raised rates on their mortgage deals.

Although the most competitive deals are starting to disappear borrowers can still get sub-1% deals. The lowest fixed rate is available from Cumberland Building Society at 0.88% (3.7% APRC) fixed for two years, which is only available to homeowners looking to remortgage.

Another sub-1% rate on a two year fixed remortgage deal are available at 0.91% (3.2% APRC) from Lloyds Bank. This deal is available to those with 40% equity in their home and who are looking to borrow a minimum of £250,000. It charges £1,499 in product fees. Both HSBC and Lloyds Bank also offer deals at 0.99% (3.2% APRC). Both these deals are available to homeowners with 40% equity in their home and charge £999 in product fees. Nationwide Building Society offers 0.99% (3.3% APRC) fixed for two years on a remortgage deal available to homeowners with 40% equity in their home who are looking to borrow a minimum of £300,000. This deal charges £1,499 in product fees. Monmouthshire Building Society also has a two year fixed remortgage deal offering 0.99% (4.3% APRC), which is available to those in England and Wales and requires homeowners to have 25% equity in their home. This deal charges £1,495 in product fees.

The only five year deal offering a sub-1% rate is Ulster Bank with a deal offering 0.99% (2.7% APRC), but which is only available to those living in Northern Ireland. The next lowest rate is Lloyds Bank’s five year remortgage deal offering 1.07% (2.7% APRC), which is available to homeowners with 40% equity in their home who are looking to borrow a minimum of £250,000. This deal charges £1,499 in product fees.

In the moving home mortgage chart the most competitive rates are on deals that have localised opening restrictions. Progressive Building Society, for example, has the lowest rate in the two year fixed moving home chart with a deal offering 0.89% (3.9% APRC), but which is only available to those living in Northern Ireland. NatWest Int Sols, HSBC, Nationwide Building Society and Monmouthshire Building Society, however, all have two year fixed moving home deals offering sub-1% rates.

NatWest Int Sols, which is only available through mortgage brokers, offers 0.97% (3.2% APRC) on a deal available to those with a 40% deposit and which charges £995 in product fees. HSBC offers 0.99% (3.2%) and, again, requires a 40% deposit. This deal charges £999 in product fees. Meanwhile, Nationwide Building Society offers 0.99% (3.2% APRC) on a deal that also requires a 40% deposit, for those borrowing £275,000 or more, which charges £1,499 in product fees. The deal from Monmouthshire Building Society is only available to those in England and Wales and offers 0.99% (4.2% APRC). A 25% deposit is needed for this deal, which charges £1,645 in product fees.

In the five year moving home chart the only sub-1% deal comes from Ulster Bank, which offers 0.99% (2.6% APRC). The lowest rate in this chart on a deal without localised opening restrictions is 1.12% (2.7% APRC) available from NatWest, NatWest Int Sols and Royal Bank of Scotland. All these deals require a 40% deposit and charge £995 in product fees.