Homeowners can now access mortgage deals with interest rates below 1.5%, as lenders release record-low deals back to the market.
According to the financial information group, Moneyfacts, the average interest for a two-year and five-year fixed-rate mortgage has dropped to the lowest levels since records began in 2007.
The average rate charged on a two-year deal is now just 2.02% while interest rates on a five-year fixed average 2.26%.
This is significantly below the record low of 2.66% that was set in April.
The Bank of England made two emergency cuts to the UK base rate in response to the coronavirus outbreak.
The base rate dropped from 0.25% to a new record low of 0.1% in March.
This fall in the official cost of borrowing has impacted swap rates (when two different parties swap interest rates), upon which fixed-rate mortgage deals are based.
As the Bank of England lowered its base rate, providers are paying less to savers, meaning they can pass on these reductions to borrowers.
This is why we’re seeing extraordinarily low rates return to the market.
The record-breaking fall in average fixed-rate deals makes it a great time to re-mortgage!
Especially if your current mortgage deal is coming to an end or you’re sitting on your lender’s standard variable rate.
The typical interest rate charged on an SVR is around 4.5%.
This means that homeowners could save more than £3,200 a year if they switch to an average two-year fixed rate deal of 2.02%, based on a £200,000 mortgage.
The gap between the cost of a two-year and a five-year fixed-rate deal has also narrowed.
So, homeowners can now pay a lower premium for the security of knowing that their mortgage payments will remain the same for the next five years.
At Edward Mellor, we have a dedicated team of mortgage experts on hand to offer you professional advice and guidance.
Our advisors compare the latest rates of 50+ high street and niche lenders to find the right one for your circumstances.
And once we’ve found the best deal for you, we’ll liaise with the lender and handle all the paperwork too.
To book your FREE mortgage consultation now call 0161 448 4830.
You can also book your appointment online, here.
We can take appointments over the phone or via video conference depending on your preferences.
* Your home/ property may be repossessed if you do not keep up repayments on your mortgage.