Just when borrowers thought mortgage rates couldn’t get any lower, a lender has this week launched a five-year fix at 1.99 per cent. This is a truly astonishing rate, extremely cheap for medium-term protection against interest rate rises. It means that a five-year fix isn’t that much more expensive than a two-year fix.
Of course, not everyone will qualify for it. Firstly, you need a 40 per cent deposit and then there is a £1,499 fee to pay. You will also need a squeaky clean credit history and you will need to meet the lender’s tight affordability criteria. If you are self-employed, rely on bonuses or need an interest-only mortgage, it is going to be even trickier.
But while not everyone will be able to access this deal, there is a wide range of rock-bottom rates available. Lenders are keen to lend and have plenty of capacity to do so. While it may be trickier to get a mortgage since tougher affordability rules were introduced last year, an independent mortgage broker will be able to advise as to the best course of action.