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Revealed: best mortgage rates in the 2019 January sales

Get the lowdown on the cheapest mortgage rates available this month

You might associate January sales with high-street shopping, but mortgage lenders have been getting in on the act too – and some of the biggest players have cut their rates.

Of course, for every eye-catching offer there’s a price hike elsewhere, meaning homebuyers and remortgagers need to be savvy to find the best mortgage deal.

Here, we explain the prices that are going up and down, and look at the main mortgage trends so far this month.

 


High-street lenders cutting mortgage rates

So far this month, a host of mortgage lenders have cut the rates on their deals. Offers from some of the biggest lenders in the residential market include:

  • Natwest – some fixes cut by up to 0.5%
  • Halifax – some fixes and trackers cut by up to 0.36%
  • Santander – some fixes and trackers cut by up to 0.25%
  • Barclays – some fixes cut by up to 0.14%
  • HSBC – price cuts of up to 0.1% on some fixed-rate and tracker mortgages

(Links take you to our reviews of each mortgage lender.)

Are mortgage rates falling overall?

Yes, but only very slightly. The average cost of a two-year fixed-rate deal has dropped by 0.02% so far this month, while five-year fixes have dropped by 0.04%.

January 1 January 24 Change
Average two-year fixed rate 2.52% 2.50% -0.02%
Average five-year fixed rate 2.94% 2.90% -0.04%

Source: Moneyfacts, 24 January.

That’s because, while some lenders are cutting the costs of mortgages, others are increasing their prices.

For example, TSB has increased some of its rates by 0.1% this month, while Yorkshire Building Society and First Direct have both cancelled out rate cuts on some of their deals with hikes on other products.

This means it’s important for homebuyers and remortgagers to do their research and consider taking professional advice before committing to a mortgage deal.

January’s mortgage trends

So far this month, we’ve seen trends towards longer-term fixes getting cheaper, more options appearing for Help to Buy users, and some specialist lenders pulling products.

1. Five-year price gap drops to just 0.4%

Five-year fixed-rate mortgages might have attracted increasing numbers of borrowers in 2018, but there are signs that these longer fixes are becoming even more attractively priced in 2019.

The gap in cost between two and five-year deals has now closed to just 0.4%, the second-lowest figure seen in the last five years (just above the 0.39% recorded last September).

The chart below shows how increased competition between lenders to attract customers looking for longer-term fixes has resulted in price cuts.

2. Ten-year fixes continuing to get cheaper

Ten-year fixed rate 1mortgages have also increased in popularity in the past few years – and they, too, are continuing to get cheaper.

Data from Moneyfacts shows the number of these deals has increased from just 16 to 150 since January 2014, with average rates dropping from 4.61% to 3.05%.

Earlier this month, Coventry cut the costs of some of its 10-year fixes, meaning it retains the top spot at four loan-to-value ratio (LTV) levels, as shown below. (Links take you to product details on Which? Money Compare, the Which? comparison site.)

There are still very few 10-year fixes available to first-time buyers with a 5% deposit – and rates remain highly uncompetitive.

LTV Lowest initial rate Revert rate APRC Fees
65% 2.35% 4.74% 3.3% £999
75% 2.39% 4.74% 3.3% £999
85% 2.55% 4.74% 3.3% £999
90% 2.99% 4.74% 3.7% £999

Source: Moneyfacts, 23 January.

If you’re thinking of taking out a five or 10-year fix to protect yourself against future rate rises, it’s important to watch out for early repayment charges.

3. More Help to Buy remortgaging options

As we reported earlier this week, homeowners struggling to find a Help to Buy remortgage deal are already enjoying more options in 2019.

So far this week, two lenders – Yorkshire Building Society and Accord Mortgages – have adapted their products to allow Help to Buy users to remortgage upwards as high as 95%, meaning they can pay off their equity loans in the process.

4. Specialist lenders leaving the market

The news this month has not been good for niche borrowers, however, with two providers pulling out of the market so far in January.

Secure Trust Bank and Fleet Mortgages have both stopped offering mortgage deals, citing a sluggish market and funding issues respectively.

This means that there could be fewer options available for those with less straightforward applications, such as some self-employed homebuyers.

Lowest rates at different loan-to-value ratios

If you’re thinking of buying a home or remortgaging this month, you might be wondering what kind of rate you can get.

Below, we’ve listed the cheapest introductory rates currently on offer at four popular LTV levels.

First, though, two words of warning about ‘chart-topping’ deals:

  1. You might find it harder to get accepted for the very cheapest available rates, so don’t base all of your calculations on the figures you see below.
  2. It’s important to be aware that some of the ‘best’ deals by initial rate come with significant up-front fees, so always compare the overall cost of a mortgage and not just the interest rate.

65% loan-to-value

Deal type Lender Initial rate Revert rate APRC Fees
Two-year fixed rate Leeds Building Society 1.39% 4.69% 4.8% £1,999
Five-year fixed rate Yorkshire Building Society 1.91% 4.99% 3.8% £995

75% loan-to-value

Deal type Lender Initial rate Revert rate APRC Fees
Two-year fixed rate Atom Bank 1.44% 4% 3.7% £1,200
Five-year fixed rate Halifax 1.89% 4.24% 3.5% £1,499

90% loan-to-value

Deal type Lender Initial rate Revert rate APRC Fees
Two-year fixed rate Atom Bank 1.79% 4% 3.8% £1,200
Five-year fixed rate Atom Bank 2.24% 4% 3.5% £1,200

95% loan-to-value

Deal type Lender Initial rate Revert rate APRC Fees
Two-year fixed rate Halifax 2.67% 4.24% 4.1% £1,495
Five-year fixed rate Atom Bank 3.24% 4% 3.8% None

Source: Moneyfacts, 23 January. Fixed-rate repayment mortgages only. Where possible we’ve linked to deals on Which? Money Compare.

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