25 Apr 2024

Lowest Mortgage Rates Ever

Fixed mortgage rates are dropping like stones, Moneyfacts research reveals. Rates started a slow descent shortly after the Government’s Funding for Lending Scheme (FLS) began last August and have picked up speed with new ‘best ever’ deals coming onto the market almost daily.

We are currently experiencing the lowest two, three and five year average fixed rate mortgages seen since their launch in 1989.

Bank of England Base Rate fell to its current historic low in March 2009; four years later and it has been matched with historically low mortgage rates too.

Not only are averages in freefall, many individual providers are joining the downward race with gusto as those that have joined the FLS must increase their loan books or face stiff penalties.

Average Fixed Rate Mortgages
	Feb-09	Feb-10	Feb-11	Feb-12	Feb-13
5 Year	5.67%	6.00%	5.41%	4.64%	4.14%
3 Year	5.56%	5.47%	5.05%	4.63%	4.36%
2 Year	4.88%	4.82%	4.49%	4.36%	4.11%
Source: Moneyfacts.co.uk

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“At last we have some good news to talk about with regards to finance; fixed mortgage rates are coming down.

“Of course, this doesn’t mean it will be any easier to get a mortgage approved, you will still need to have a clean credit record, income sufficient to not only pay today’s mortgage rate but also potential future increases and of course the stickler for most, the deposit.

“But if you can satisfy the banks’ lending criteria and have a deposit or equity from a current house, then there are some amazing offers to be had.

“Recent criticism levied at banks was that they were offering the best mortgage deals in the less risky 60% loan-to-value (LTV) tier. It is good news on that front too, as some very attractive higher LTV loans are at last entering the market.

“To put the current rates into context, if you had opted for a two year fixed in June 1989, you would have paid an average rate of 12.83% (the least competitive rate was a breath stopping 13.20%). A five year fixed averaged out at 12.85%”

2 Year Fixed Rates
Lender	Rate	Maximum LTV	Fees
Chelsea BS	1.89% Fixed to 30/04/2015	60%	£1,695	Lowest on Moneyfacts records
NatWest Int Sols	2.29% Fixed to 31/05/2015	70%	£1,995	Lowest since Feb 2011
Market Harborough BS	2.75% Fixed to 31/03/2015	80%	£595
Chelsea BS	3.69% Fixed to 30/04/2015	90%	£1,695	Lowest since Sept 2007
3 Year Fixed Rates
Lender	Rate	Maximum LTV	Fees
Nationwide BS	2.59% for 3 years	60%	£999	Lowest since Jan 2012
Abbey	2.14% to 2.4.16	70%	2.50%	Lowest on Moneyfacts records
Pink Home Loans Funded-West Brom BS	2.93% to 30.4.16	80%	£995	Lowest on Moneyfacts records (intermediaries only)
Leeds BS	3.14% to 29.2.16	80%	£999	Lowest direct product on our records
Loughborough BS	4.09% for 3 years	90%	£499	Lowest on Moneyfacts records
5 Year Fixed Rates
Lender	Rate	Maximum LTV	Fees
Post Office®	2.74% to 31.3.18	60%	£995	Lowest on Moneyfacts records
Tesco Bank	2.89% to 30.4.18	70%	£1,495	Lowest on Moneyfacts records
Pink Home Loans Funded by West Brom BS	3.10% to 28.2.18	80%	£1,694	Lowest on Moneyfacts records (intermediaries only)
West Brom BS	3.39% to 28.2.18	80%	£748	Lowest direct product on our records
Hanley Economic BS	4.20% to 30.4.18	90%	None	Lowest on Moneyfacts records
Source: Moneyfacts.co.uk

Moneyfacts Group

Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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