Metro Bank has introduced the lowest five-year fixed rate mortgage on the market after lowering its rates on a number of deals.
The lender has slashed up to 0.30 per cent off a range of its mortgage deals, with the stand-out offer being its 1.99 per cent deal for borrowers with a loan-to-value of up to 65 per cent.
The move comes on the back of much change in the market, after the UK’s vote to leave the European Union in June and the Bank of England’s (BoE’s) decision to lower the base rate to a historic low of 0.25 per cent.
In the immediate aftermath, it appears that mortgage customers will be among the beneficiaries, with lenders taking steps to offer increasingly competitive rates on a range of products.
Fixed rate, tracker rate and standard variable rate mortgage customers are all benefitting from a range of discounts, with tracker customers receiving better deals in light of the Monetary Policy Committee’s (MPC’s) vote to lower the base rate. Barclays and HSBC implemented immediate reductions, with the majority of lenders vowing to reduce rates from September 1.
Many standard variable rate customers have also benefitted from the BoE decision, with Coventry Building Society, Halifax, Lloyds, Nationwide, Santander, Virgin Money and Yorkshire Building Society all moving to lower rates in the wake of the BoE move.
However, fixed rates are arguably still among the most attractive open to customers, with record-breaking deals on offer across two, five and ten-year fixed rate mortgages.
Coventry Building Society currently has a market-leading ten-year fixed rate mortgage of 2.39 per cent, while HSBC’s two-year fixed rate deals are available form just 0.99 per cent, after the lender became the first ever to dip below the one per cent barrier.
Now the five-year market has been set alight with the introduction of Metro Bank’s sub-two per cent deal, new home buyers have arguably the greatest choice ever.
Buoyant mortgage market
Many market analysts have speculated that the increasingly low rates being introduced could spark a ‘mortgage war’ between lenders, and the move is proof that the market remains buoyant in spite of the Brexit vote, according to Jeremy Duncombe, director at Legal & General Mortgage Club.
Jeremy said: “Metro Bank’s announcement is a clear reflection of a sector that’s open for business. We look forward to seeing more customer-focused products and services from the lender in the months to come.”
More deals ahead
The move is unlikely to remain unchallenged by other mortgage lenders; something illustrated by HSBC’s lowest ever ten-year fixed rate mortgage of 2.79 per cent being trumped almost immediately by Coventry’s 2.39 per cent deal in early July.
Those on tracker mortgage will also be eagerly anticipating the next announcement by the MPC on September 15, particularly after governor Mark Carney’s announcement that the 0.25 per cent cut in the base rate in August would likely not be the last time the BoE stimulates the economy this year.
For mortgage customers, the choice is now greater than ever, and more good deals could be on the way as competition between lenders continues to grow.
Use our mortgage calculator from the Mortgage Advice Bureau to work out the best deal for you.