Five year fixed rate mortgages are making a comeback, illustrating that lenders are looking to the future again by offering long-term security over short-term gains.
As lenders judge that the Bank of England base rate might be nearing rock bottom at 0.5 per cent, making tracker mortgages less attractive, they are offering longer term loans, such as five year fixed rate mortgage
. Abbey mortgages
has launched a new five year fixed rate mortgage at 3.95 per cent, with a fee of £995, but is only available to homeowners with a 40 per cent deposit.
Others with 40 per cent of the property's value ready to put down as a deposit could also apply for a new deal from HSBC which offers a rate of 3.99 per cent with a fee of £999, or customers with a 25 per cent deposit can fix their mortgage rate for five years at a rate of 4.84 per cent.
Those who are lacking a 40 per cent deposit can get their hands on five year fixes from other lenders, such as the Post Office, which is offering a rate of 4.15 per cent for those with a 20 per cent deposit, or a rate of 6.01 per cent for borrowers who have just 10 per cent of the property's value as a deposit, both with a fee of £599.
While tracker mortgages have seen a surge in popularity recently as the Bank of England has slashed interest rates to 0.5 per cent.
But it is unknown how further interest rates will fall, and many homeowners still opt for fixed rate mortgages
because of the security they offer, remaining unaffected by changes in the Bank of England base rate, which helps them to plan for the future and budget their monthly outgoings.
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