subject: Nat West Launches Mortgage Rate Race To The Bottom With Record Breaking Deal [print this page] Nat West, one of the UK"s most well-known lenders, has sparked a "race to the bottom" by launching the UK's lowest ever five year fixed rate mortgage. The bank has launched a deal at 2.95 per cent, trumping recent offerings from rivals HSBC and Santander.
With three lenders now offering five year fixed rates under 3 per cent, expert believe that a mortgage war is hotting up. Many believe that rates could fall further as competition between lenders intensifies this summer.
The Nat West product has a high arrangement fee but the benefits to large mortgage clients are clear, as we explain here.
Record breaking 2.95 per cent fixed rate is ideal for high net worth mortgage clients
Nat West, part of the Royal Bank of Scotland, has launched a record-breaking five year fixed rate mortgage deal at just 2.95 per cent. The rate is lower than recent deals offered by Santander and HSBC which both offered a similar deal at 2.99 per cent.
The deal has a 2,495 arrangement fee and is available to anyone looking to borrow up to 60 per cent "loan to value".
Islay Robinson, director of London mortgage broker Enness Private Clients, welcomed the new Nat West deal. He said: "A price war between lenders to see who can offer the lowest five year fixed rate is clearly only good for borrowers.
"This new deal is the lowest ever five year fixed rate mortgage deal offered in the UK and is ideal for any high net worth mortgage clients looking for the security of a fixed deal at an incredibly low rate."
The Daily Telegraph reports that "the three month Libor rate" "the rate which banks use to lend to one another " "has been reducing since January, meaning that it is cheaper for the banks to lend money."
Mortgage expert Stuart Gregory also believes that many lenders are seeking to increase their market share in a competitive marketplace. He said: "We are reaching the midyear point where lenders are assessing how much they have lent " " and perhaps finding out how far behind their own targets they are."
The Daily Telegraph believes that Nat West have sparked a "race to the bottom" with other lenders expected to enter the market with similarly competitive rates. And, this could be good news for the UK's struggling housing market.
The newspaper reports that "the Government will be heartened by the prospect of a price war after launching "funding for lending" to lower the cost of credit, especially after six months of gradual rises and Bank of England data that showed mortgage approvals collapsed in June to their lowest level in 18 months."
