Great value mortgage deals return
Five-year fixed rate deal below 4% are on the table – levels last seen before the credit crunch.
The return of competitive mortgage products comes amid growing murmurs that the Bank of England will not raise interest rates until next year, way later than expected.
For several months there's been talk that interest rates would rise from their current level of just 0.5% in May. Yet this has been pushed back to earlier next year due to concerns about the fragile economy and sluggish recovery.
Yorkshire building society has announced a five year fixed rate mortgage at 3.99% for borrowers with a 25% deposit. Chelsea building society, owned by the Yorkshire, is also offering a five-year fixed rate deal at 3.99%, yet it comes with a £1,995 arrangement fee.
Melanie Bien, of mortgage brokers Private Finance, said: "With interest rates looking increasingly unlikely to rise before next year, lenders are offering cut-price fixed rates to drum up business. With five-year fixes now starting with a '3', pricing has breached an important psychological barrier which will make such deals attractive to borrowers looking for security.
"However, trackers remain cheaper still so those borrowers who do think it will be a while before interest rates start rising may be tempted to go for a variable option, which will be cheaper at least initially."