The lowest available five-year fixed rate mortgage since the mini-Budget in September 2022 is now available at 3.77% (for 60% LTV).
NatWest has launched the mortgage deal, which is the the lowest five-year product on the market – with other major lenders also announcing cuts to prices.
The deal, which is only available for those buying homes, is slightly below Halifax’s rate of 3.81%, which was at the start of this week the cheapest on the market.
The cut comes as other lenders have announced rate reductions this week, amid growing speculation that the Bank of England could opt to cut the interest rate further in the fourth quarter of the year, which would likely improve consumer confidence.
Barclays has cut several products this week, including a reduction on its five-year fix for remortgages, which went from 4.06% to 3.93%.
HSBC will also reduce rates, though it has not confirmed what its new rates will be.
The NatWest deal is not cheap as it comes with a fee of £1,495.
For a rate of 3.82%, borrowers can get a lower fee of £995.
Aaron Strutt, of mortgage brokerage Trinity Financial, said: “Over the past few months, the cost of funding mortgages has dropped quite significantly and lenders are still passing on these price reductions.
“Many would argue they have not been passed on quickly enough, especially to borrowers with smaller deposits.
“Markets are still pricing in another one or two Bank Rate cuts this year. With the way banks and building societies are continuing to lower their rates, it does seem likely we will see a 3.5% five-year fix soon.”
Other key points this week include the average five-year fixed mortgage being a full 1% lower than last year, and the average 60% five-year rate dipping below 4%.
Headlines:
The average 5-year fixed mortgage rate is now 4.68%, down from 5.68% a year ago
The average 2-year fixed mortgage rate is now 5.04%, down from 6.27% a year ago
The average 85% LTV 5-year fixed mortgage rate is now 4.71%, down from 5.73% a year ago
The average 60% LTV 5-year fixed mortgage rate is now 3.97%, down from 5.33% a year ago
The average monthly mortgage payment on a typical first-time buyer type property when taking out an average five-year fixed, 85% LTV mortgage, is now £1,097 per month, down from £1,193 per month a year ago
Latest rates data:
| LTV
(loan to value) |
Term
|
Average rate 4th September 2024 | Lowest rate 4th September August 2024 | Average rate
a year ago |
|
All
|
2 year fixed | 5.04% | 4.12% | 6.27% |
|
All
|
5 year fixed | 4.68% | 3.77% | 5.68% |
| LTV
(loan to value) |
Term
|
Average rate 4th September 2024 | Lowest rate 4th September August 2024 | Average rate
a year ago |
|
95%
|
2 year fixed | 5.72% | 5.35% | 6.61% |
|
95%
|
5 year fixed | 5.37% | 5.05% | 5.99% |
|
90%
|
2 year fixed | 5.49% | 5.12% | 6.46% |
|
90%
|
5 year fixed | 4.99% | 4.55% | 5.85% |
|
LTV (loan to value) |
Term |
Average rate 4th September 2024 | Lowest rate 4th September August 2024 | Average rate
a year ago |
|
85%
|
2 year fixed | 5.05% | 4.55% | 6.31% |
|
85%
|
5 year fixed
|
4.71% | 4.17% | 5.73% |
|
75%
|
2 year fixed |
4.79% | 4.37% | 6.12% |
|
75%
|
5 year fixed
|
4.45% | 3.93% | 5.52% |
|
60%
|
2 year fixed
|
4.30% | 4.12% | 5.96% |
|
60%
|
5 year fixed |
3.97% | 3.77% | 5.33% |
Source: Rightmove
