West Bromwich Building Society has jumped on the 10-year bandwagon with a fixed rate priced at 2.79 per cent.
From tomorrow (8 July), the lender will be introducing purchase and remortgage/switcher rates at 2.79 per cent for 65 per cent loan-to-value deals, along with products priced at 2.99 per cent for 80 per cent LTV.
Booking fees of £199 apply to mortgages for purchase, but are waived for remortgages. Everyone gets free first standard valuations, while remortgagers also get assistance with legal fees.
The deals are fixed until 30 November 2026 and revert to a standard variable rate (currently 3.99 per cent variable) for the term.
The minimum loan size is £40,000 and procuration fees of 0.40 per cent are payable to intermediaries.
West Brom’s head of products David Taylor said the new deals increase consumer choice, depending on how long they want to protect themselves for against any increases in Bank Rate.
“Knowing exactly what you will be repaying each month over a longer term gives peace of mind and can help with budgeting. It also saves people the time and expense of remortgaging every few years,” he added.
Just this morning, HSBC launched a 10-year fix, priced at 2.79 per cent for purchases and remortgages for up to 70 per cent loan-to-value, with no product fee.
The launch came with research among more than 1,500 UK homeowners and current house-hunters at the end of May which found almost three quarters would consider fixing their mortgage for 10 years.
On Wednesday (6 July), Coventry Building Society announced the lowest ever 10-year fixed rate at 2.39 per cent, for deals at 50 per cent LTV. Also available from Friday, the product comes with a fee of £999.
David Hollingworth, associate director at London & Country Mortgages, said these rate cuts come following the big fall in swap rates after the referendum vote.
“Borrowers already had a good choice of very low rates but this takes it to a new level,” he commented, adding there is no reason to think that this trend won’t see other lenders sharpen their rates and more competition in the five and 10 year market looks likely.
He said: “It is important for borrowers to consider that they will be locked into most of these deals for the full 10 years and ERCs can be substantial and limit flexibility in the future despite being portable.
“However, amidst an uncertain market post-Brexit, I would not be surprised to see more borrowers looking at medium to longer term fixed rates,” he added.