Christ­mas price war sees mort­gage rates hit 1.05%

Daily Mail - - News - By James Sal­mon As­so­ci­ate City Edi­tor

A CHRIST­MAS mort­gage price war has dragged the cost of home loans to record lows.

A slow­down in the prop­erty mar­ket has fuelled com­pe­ti­tion among high street lenders, forc­ing them to of­fer the cheap­est ever deals to at­tract wary bor­row­ers.

Av­er­age rates for five-year, ten-year and even fif­teen-year mort­gages are all at the low­est level on record, while two-year fixes are close to record lows.

The com­pe­ti­tion means some­one can fix their mort­gage for as lit­tle as 1.05 per cent for two years, 1.44 per cent for five years, 2.2 per cent for ten years, and 2.55 per cent for 15 years, ac­cord­ing to anal­y­sis by Money­facts.

A first-time buyer with a de­posit of just 5 per cent can get a rate of 2.75 per cent in a five-year fixed-rate mort­gage, fall­ing to 2.39 per cent on a two-year fix.

And for those who can stump up a 40 per cent de­posit, the best two-year deal comes from Hal­i­fax with a rate of 1.05 per cent.

David Holling­worth, of mort­gage bro­ker Lon­don & Coun­try, said: ‘Bor­row­ers have never had it so good... Some movers are sit­ting on their hands as there is not as much ac­tiv­ity as an­tic­i­pated. This only in­creases the need for lenders to beat their ri­vals to the punch.’ Rachel Springall, of Money­facts, said: ‘This mort­gage rate war in the run-up to Christ­mas may well be at­trib­uted to providers’ ap­petite to keep the mort­gage mar­ket mov­ing and to meet end-of-year lend­ing tar­gets.’

Last week Money­facts said the av­er­age rate on ten-year fixed rate mort­gages had fallen to a record 2.76 per cent. The cheap­est deal is 2.2 per cent from Coven­try, York­shire and Chelsea build­ing so­ci­eties.

Vir­gin Money of­fers the best fif­teen-year fixed rate deal at 2.55 per cent and there are also cheaper rates for first-time buy­ers. The av­er­age two-year fix with a 5 per cent de­posit has fallen to 3.25 per cent – from 4.21 per cent in 2017. The best rate is 2.39 per cent from Pro­gres­sive Build­ing So­ci­ety.

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