A sub-4% two-year fixed rate deal from Santander and a price cut for Skipton’s popular Track Record Mortgage stand out, as the mortgage highlights this week.
Virgin, Nationwide and HSBC are also among the lenders that have cut rates as the mortgage price war continues.
The latest data from Moneyfacts shows that the average two-year fixed rate today (Tuesday 17 September) is 5.48%, up from 5.53% a week ago.
Meanwhile, the average five-year interest rate has fallen from 5.18% to 5.14% in one week.
The data comes just days after Santander announced it had become the first lender to cut one of its two-year mortgage rates below 4%.
The only one so far Mortgages of less than 4% were agreements with a term of five years. That’s why Santander’s two-year rate fix at 3.99% is being described as a ‘milestone’ for borrowers. The deal in question is for property buyers with at least 40% equity and comes with a £999 fee – but more lenders are expected to follow suit and hopefully more borrowers will ultimately benefit.
Justin Moy, managing director at EHF Mortgages, said via the Newspage agency: “This launch of a sub-4% fixed rate over two years is a milestone.
“Aggressive pricing will only intensify competition on the high street in the coming months as they all battle for market share.
“Most lenders have struggled to meet challenging targets so far this year. It may only be a 0.2% cut to their existing deal, but the shockwaves will be felt across the credit sector.”
Meanwhile, Skipton Building Society has reduced the interest rate on its Track Record Mortgage for first-time buyers.
The 100% mortgage for those who have a consistent rent payment record has proven popular since its launch in 2023, seeing a 0.05% interest rate cut and now priced at 5.44%. It comes a week after a shared ownership version of the mortgage was launched.
Jennifer Lloyd, Head of Mortgage Products and Proposition, said: “We are delighted to introduce these new 80% LTV products to our existing mortgage range. These products are designed to give our customers even more choice and flexibility to meet their individual needs. whether they are buying or taking out a new mortgage.
“In addition to these additions, Track Record is also seeing a decline adding to the great improvements announced last week to open the doors to even more retained tenants.”