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Mortgage deals under 1pc increase with competition from lenders

The number of mortgage deals offering 1% interest or less has increased as lenders compete for new and existing borrowers.

More lenders are offering mortgage deals with interest rates under 1% as competition increases for homeowners and home movers as the market slows down, says Moneyfacts.

The lowest rate is from Nationwide Building Society for remortgage buyers with a minimum loan of £300,000 offering a 0.91% rate with a 60% LTV on two-year fixed mortgage and product fee of £1,499.

Paying high fees are usually only affordable if you have a large mortgage and low rates are generally offered to those that meet the lender's eligibility criteria.

Mortgage deal costs are falling

As the government’s mortgage holiday comes to an end, more lenders are introducing lower interest rates under 1% to attract new business particularly with lower LTV.

For higher loan-to-values there is more scope to cut prices in the future as this market experienced a significant drop in demand during the uncertainty of the pandemic.

The table from Moneyfacts shows the best 2-year fixed mortgage rates under 1% for different terms and the product fees.
Lender Rate Product fee
Nationwide 0.91% £1,499
NatWest 0.94% £995
RBS 0.94% £995
HSBC 0.94% £999
TSB 0.94% £995
Cumberland BS 0.98% £1,999
Progressive BS 0.99% £995
NatWest has a two-year fixed rate of 0.94% based on a 60% LTV and a product charge of £995 for remortgage buyers and this reduces to 0.93% for home movers.

Nationwide offers a 0.94% two-year fixed rate with a minimum loan of £25,000 and product fee of £995 if you have a 60% loan-to-value.

If you are a first time buyer requiring a loan under £150,000 for two years, it may be cheaper to select a mortgage product with a higher fixed interest rate with incentives and no product fee.

See how much your monthly payments are for your mortgage when buying your property at this link:
Mortgage cost calculator with instant results and figures for your new home.

More lenders reduce rates to under 1%

There is more choice from major banks with the Royal Bank of Scotland offering 0.94% rates for remortgaging with 60% loan-to-value fixed until 30 November 2023 and fee of £995.

HSBC has a remortgage and moving home offer with 0.94% rate fixed for two-years reverting to 3.54% after the mortgage deal, again on a 60% loan-to-value basis and £999 fee.

The interest rate is lower with a larger deposit and equity release buyers can access cash for a specific reason using a lifetime mortgage to give to children and grandchildren.

The Cumberland BS has a remortgage deal with 60% LTV offering 0.98% fixed until 1 October 2023 and £1,999 fee but restricted to Northumberland, North Lancashire, Dumfriesshire and Cumbria areas.

Progressive Building Society offers remortgage and moving home deals at 0.99% fixed for two-years for 60% LTV and £995 fee but only for those living in Northern Ireland.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home and looking for the best mortgage deal. Learn more by using the property value tracker chart and equity release calculator.

Start your free home moving quote and we can show the leading mortgages and lowest rates for your new home at this link:
Free mortgage quote with the lowest mortgage rates for your new property.

If you are releasing equity from your property to repay an existing mortgage, we can recommend lifetime mortgages so begin your equity release quote for the latest provider offers.


Mortgage Best Buys

These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.

1.16% Fixed Rate
60% Loan to Value
£1,525 App Fee
Until 01/11/2022
Reverts to 4.09%
1.17% Fixed Rate
60% Loan to Value
£1,025 App Fee
Until 31/09/2022
Reverts to 3.59%
1.19% Fixed Rate
60% Loan to Value
£999 App Fee
2-Years Time
Reverts to 3.59%
1.18% Fixed Rate
60% Loan to Value
£1,034 App Fee
Until 31/10/2022
Reverts to 3.59%

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