Coventry BS launches lowest ever 10-year fixed rate
The product, which comes with a fee of £999, is one of a raft of cut-priced fixes the society will make available from Friday. A fee-free option priced at 2.69% is part of the refreshed product line.
Kevin Purvey, head of intermediaries, said: “The fall in swap rates means we’ve an opportunity to offer these market-leading rates to people looking for long-term security in these uncertain times.”
Coventry’s 10-year fix comes with early repayment charges for the term of the product. Borrowers looking to redeem before the product expires will pay 5% of the mortgage balance during the first two years, 3% for the next three years and 1% for the remaining term.
Moneyfacts finance expert Rachel Springall said: “A decade-long fixed mortgage is becoming a growing trend amongst lenders who are providing borrowers with a long-term option to secure their monthly mortgage payments.
“This trend may well continue to grow in times of uncertainty, but borrowers must always work out the true cost of any deal and be sure that their circumstances will remain relatively unchanged for the next 10 years.”
Currently, the lowest 10-year fix available is Leeds Building Society’s 2.84% deal at 65% LTV, which carries a fee of £1,499.
TSB’s 10-year fix, available up to 60% LTV, while priced slightly higher at 3.19% with a fee of £265, has a shorter redemption period covering just five years of the product term, at a decreasing rate of 5/4/3/3/1%.
True cost comparisons of medium to long-term fixed rates
Assuming all customers borrowed £200,000 over 25 years (source: Moneyfacts)
|Lender||Product||Rate||LTV||Fee||True cost after 5 years|
|Coventry||5-year fix||2.29%||50%||fee free||£52,573.80|
Several of Coventry’s products will be withdrawn on Friday including the 10-year fix at 2.99% for loan-to-values of 65%.