The Daily Telegraph - Saturday - Money
Mobile lender offers five-year mortgage at a rate of 1.29pc
Atom Bank is slashing the rates on its five-year fixed-rate mortgages, charging as little as 1.29pc for a five-year deal.
The new five-year rates will cost the same as Atom’s existing two-year rates, and will be the cheapest on the market by a significant margin. They became available from April 12 “for a limited time”.
A mortgage with a 40pc deposit will cost 1.29pc with a £900 fee, or 1.64pc without the fee. Someone borrowing £210,000 for a £350,000 home at 1.29pc would pay £819 a month, or £50,058 over the five years, including fees. Barclays offers the next cheapest comparable mortgage, at 1.75pc with a £999 fee, which would cost £53,145 over the five-year term.
For those with a 10pc deposit, Atom’s rate will be 1.99pc with a £900 fee, or 2.44pc with no fee. Someone borrowing £315,000 towards a £350,000 home on the 1.99pc deal would pay £1,334 a month, or £80,916 over the five years including the fee. The next cheapest deal is from HSBC, which charges 2.74pc with a £1,262 fee. Repayments would be £1,452 a month – a total cost of £88,353 over the five year deal.
Borrowers can access onlineonly provider Atom Bank’s mortgages via a panel of brokers – customers can request a list. They can track their application via Atom’s smartphone app, where they also manage the mortgage.
Ray Boulger, of broker John Charcol, said the new rates are likely to be “loss leading” as part of a marketing strategy to boost the lender’s profile.
He said: “The rates are fantastic. If you meet the criteria, this is one case where there is merit to jumping in quickly. I can’t see the rates being around for very long.”