Nationwide launches record 5-year fixed-rate mortgage

4 min Read Published: 22 Jul 2021

Nationwide launches record 5-year fixed rate mortgageThe so-called "mortgage price wars" are heating up as Nationwide launches the UK’s lowest ever 5-year fixed-rate mortgage, with an interest rate of just 0.99%.

The building society’s offer is the first 5-year mortgage on record to charge an interest rate of less than 1% during the fixed period. The deal is available from Wednesday 21 July 2021 to those with a deposit of at least 40% and comes with a fee of £1,499.

A number of lenders have recently offered sub-1% rates on 2-year fixed-rate mortgages, but there has historically been a larger margin between these rates and longer-term deals. However, not only have rates come down across the board lately, the gap between short and long-term rates has also narrowed as lenders capitalise on the continuation of historically low interest rates and high activity in the housing market. You can read more about house prices in our article "What is going to happen to UK house prices? July 2021".

Bear in mind, however, that these lower interest rate deals often come with a higher upfront fee. This means you may have to shell out more initially to get a deal, but the lower rates will save you more in the long run. That being said, most of the lower rate mortgages are only available for those with a large deposit (as high as 40% in most cases), so it may be difficult for first-time buyers and those without existing equity to snag these record-breaking deals.

Nevertheless, with the risk of rising inflation and the potential for an interest rate hike in the future, many will be looking to make the most of long-term fixed-rate deals, especially while central rates are historically low. Check out Damien's interest rate predictions for an in-depth overview of the UK's upcoming monetary policy, and how any changes could affect your mortgage.

So whether you're looking to move or remortgage your existing property, we’ve rounded up the best 2 and 5-year fixed-rate mortgages on the market right now.

The best 2-year fixed-rate mortgage deals at 1% or lower

Lender Initial rate Upfront fee Maximum LTV For
NatWest 0.91% £1,499 60% Homebuyers and remortgagers
HSBC 0.94% £999 60% Homebuyers and remortgagers
Platform 0.95% £1,499 60% Homebuyers and remortgagers
Nationwide 0.99% £1,499 60% Homebuyers and remortgagers
Santander 1.00% £999 70% Homebuyers and remortgagers

Rates were correct as of 21/07/2021.

The best 5-year fixed-rate mortgage deals

Lender Initial rate Upfront fee Maximum LTV For
Nationwide 0.99% £1,499 60% Homebuyers and remortgagers
HSBC 1.06% £1,499 60% Homebuyers and remortgagers
NatWest 1.13% £995 60% Homebuyers and remortgagers
Platform 1.16% £1,499 60% Homebuyers and remortgagers
Santander 1.18% £999 70% Remortgagers

Rates were correct as of 21/07/2021.

More mortgage advice

As always, before making a decision on such a large investment, you should seek advice from a mortgage broker about the best deal for you and the ones you are most likely to be accepted for. We personally recommend Habito* for meeting all your mortgage questions and queries. You can check out our independent Habito review here.

For more help with all things mortgage, check out our articles “How much can I borrow on my mortgage?”, "How to remortgage and get the best rate", or use our mortgage best buy table to calculate the best mortgage deal for you.

 

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