It is currently possible for those with the biggest deposits to fix for five years at just under 2 per cent, while those with 10 per cent to put down can fix for five years at under 3 per cent.
For two-year fixes, the lowest rates are now less than 1 per cent if you have a big deposit and 2 per cent if you have just 10 per cent.
Those looking to buy a home or remortgage will find that now is a good time to look for a home loan, with record low mortgage rates on offer.
Many are still being nudged by brokers into taking out two-year fixed rate mortgages, yet it is wise to question if this is the best move.
The attraction of a two-year fix may be lower rates now and extra flexibility, but that comes at the expense of needing to remortgage in two years to avoid slipping onto a more expensive standard variable rate.
Even though many lenders have passed on the base rate cut of 0.25 per cent to borrowers on SVR, that won’t mean everyone benefits. Lenders such as Nationwide are bound to pass on the cut to borrowers who went onto SVR before 29 April 2009 but anyone coming to the end of their deal since goes onto the lender’s standard mortgage rate – which the lender can change at its own discretion.
A five-year fix gives the opportunity to lock into a low rate for a longer period and avoid extra fees and higher rates in a relatively short time.
Article by Simon Lambert & Sarah Davidson for ThisIsMoney.co.uk