Save, make, understand money

First-time Buyer

Mortgage war continues as rates fall below 5%: Barclays, Virgin Money, HSBC, The Mortgage Works and YBS slash prices

Nick Cheek
Written By:
Nick Cheek

Homeowners have received a welcome boost as Barclays, Virgin Money and Yorkshire Building Society (YBS) have joined the lenders slashing rates on mortgages.

On Thursday, The Mortgage Works cut rates by up to 0.5%, meaning for the first time since early summer, a fixed rate mortgage is available for less than 5%.

The Nationwide subsidiary slashed its buy-to-let range and announced the five-year fixed rate (purchase and remortgage) for 4.99% with a 3% fee, available up to 55% loan to value (reduced by 0.15%).

Daniel Clinton, head of specialist lending at The Mortgage Works, said: “We are pleased to announce further rate reductions following a sustained period of stability in the swap rate environment. These reductions will be well received by buy-to-let investors and provide welcomed relief over their repayments.”

Yorkshire Building Society followed suit and now boasts its first sub-5% five-year fixed rate since June as it reduced rates across its range.

Its five-year fixed rate at 75% loan to value (LTV) is 4.99% with £1,495 fee. The purchase version comes with free standard valuation and remortgage is subject to free valuation and remortgage legal service.

Coventry Building Society also ended last week by cutting rates across its residential two, three and five-year fixed products by as much as 0.29%.

Rates lower than 5% for first time since June

Barclays has reduced two and five-year fixed purchase rates by around 0.1% and its two-year fixed rate at 60% LTV with £899 product fee went down to 5.68% from 5.78%.

Last week, Virgin Money reduced rates by a similar amount as it made cuts to its purchase exclusive products with a £1,295 fee and free valuation.

Its two-year fix at 65% loan to value was lowered by 0.05% to 5.6%, and the 75% LTV option was reduced by 0.1% to 5.6%.

And, as of today, HSBC customers can enjoy reduced rates in residential and buy-to-let mortgage products too. Residential first-time buyer and home mover products up to 95% LTV are lower, as well as residential remortgage and residential remortgage cashback deals up to 90% LTV.

‘Great to see competitive deals’

Research from financial data service Moneyfacts found the average rate on a new fixed-rate deal lasting for five years was now 6.14%, with the figure plummeting to 5.12% for the cheapest five-year fix.

Rachel Springall, finance expert at Moneyfacts, said: “It’s great to see such competitive deals launched by Yorkshire Building Society. Borrowers looking for a new low-rate mortgage will find the sub-five per cent five-year fixed deal is the lowest rate available in its sector.

“The incentive packages available across all the new deals today may also be popular with borrowers looking to save on the upfront cost of their mortgage.”