best homeowner mortgage rates for 2019 – Which? News

best homeowner mortgage rates for 2019 – Which? News

If you’re coming to the end of your fixed term in April, it’s a great time to switch mortgage – with attractive rates available across the board.

The cheapest fixed-rate remortgaging deal charges just 1.43% APR, but there are great rates to be had for people who own a lot of their property, or just a small slice of it.

In this article, we’ll take a look at the remortgaging market for homeowners and offer advice on how to choose the right mortgage deal.


Why should you remortgage?

If you’re currently on a fixed-rate deal, it’s important to remortgage before you come to the end of your introductory term.

If you don’t switch, you’ll automatically be moved on to your lender’s standard variable rate (SVR), which will be significantly higher and could add thousands of pounds on to your annual repayments.

As well as reducing your monthly repayments, remortgaging can allow you to release cash from your home.

How much could you save by remortgaging?

If you’ve been paying off your mortgage for a couple of years already, you’ll have started to build up more equity in the property, which means you could switch to a new deal at a lower loan-to-value (LTV) level.

When we crunched the numbers in January, we found that if you bought a £200,000 property with a 95% mortgage and made repayments for two years, it could be possible to remortgage at 85% LTV.

Our analysis showed that by making this switch, a homeowner could save a little over £200 a month – or £2,500 a year.

Find out more: check out our full guide on remortgaging to save thousands.

Cheapest fixed-rate remortgaging deals in 2019

If you’re looking to remortgage, now is a good time to get a cheap deal on a fixed-rate product. Indeed, the lowest introductory rates up to 80% LTV are below 2% on two, three and five-year fixes.

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If you’re considering fixing your mortgage for longer, it’s possible to obtain a 10-year fix with a rate of less than 3% – even at 90% LTV.

The chart below shows how the length of deal you choose and the amount of equity you have in your home can affect your mortgage rate.

The tables below show the cheapest introductory rates currently available for remortgagers at four popular LTV levels.

60% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year fix Lloyds 1.43% 4.24% 3.8% £999
Three-year fix Barclays 1.63% 4.24% 3.7% £999
Five-year fix HSBC 1.81% 4.19% 3.3% £1,499
10-year fix TSB 2.29% 4.24% 3% £995

70% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year fix Yorkshire BS 1.47% 4.24% 4.3% £1,495
Three-year fix Atom Bank 1.69% 4% 3.5% £1,800
Five-year fix HSBC 1.91% 4.19% 3.6% £1,499
10-year fix TSB 2.34% 4.24% 3% £995

80% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year fix Sainsbury’s 1.62% 4.99% 4.1% £995
Three-year fix Coventry 1.89% 4.99% 4.1% £999
Five-year fix Yorkshire BS 2.01% 4.99% 3.9% £1,995
10-year fix First Direct 2.49% 4.19% 3.1% None

90% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year fix Barclays 1.78% 4.24% 4% £999
Three-year fix Atom Bank 2.04% 4% 3.7% £1,800
Five-year fix HSBC 2.29% 4.19% 3.6% £999
10-year fix Coventry 2.99% 4.74% 3.7% £999

Source: Moneyfacts. 28 March 2019. Repayment mortgages available to existing homeowners only.

Find out more: discover the best and worst banks for home loans in our mortgage lender reviews.

How long should you fix your mortgage for?

The right period to fix your mortgage for depends on several factors: your future plans, your financial situation and your appetite for risk.

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Future plans

If you’re planning to move home in the next few years, it’s best to take out a shorter-term fix or a longer-term deal that is portable or has no early repayment charges (ERCs).

That’s because while five and 10-year fixes have dropped in price, some of the cheapest deals come with ERCs as high as 5%. If you’re not planning to move anytime soon, a longer-term fix could be a safe option that protects you against rate rises.

Your financial situation: 

A two-year fix can be as much as 1% cheaper than a 10-year fix, so consider how much your mortgage repayments will be in each situation before choosing a term. If possible, find a mortgage that allows you the flexibility to make overpayments.

Your appetite for risk

In truth, nobody knows for sure what will happen with Brexit or the Bank of England base rate, and mortgage rates right now are very low.

The question is: are you willing to gamble on a cheap two-year fix now and roll the dice again in a couple of years, or would you rather settle for the security of a longer-term deal?

Cheapest variable mortgage rates

While fixed-rate mortgages make up a large proportion of the market, variable deals are also attractively priced.

Most people who take out a variable-rate mortgage choose either a discount mortgage (where the rate is the lender’s SVR minus a set percentage), or a tracker mortgage (where the rate follows the Bank of England base rate plus a set percentage).

Unlike fixed-rate deals, discount and tracker mortgages are rarely available with introductory terms of five years or longer.

The tables below show the cheapest initial rates available on two-year discount and tracker mortgages.

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60% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year discount Cumberland 1.26% (SVR – 3.48%) 4.74% 4.4% £1,999
Two-year tracker Barclays 1.44% (base rate + 0.69%) 4.24% 3.9% £999 (£200 cashback)

70% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year discount Cumberland 1.33% (SVR – 3.41%) 4.74% £1,999
Two-year tracker HSBC 1.49% (base rate + 0.74%) 4.19% 3.8% £999

80% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year discount Loughborough 1.49% (SVR – 3.85%) 5.34% 4.9% £1,499
Two-year tracker HSBC 1.59% (base rate + 0.84%) 4.19% 3.9% £999

90% LTV

Type of deal Lender Initial rate Revert rate APRC Fees
Two-year discount Loughborough 1.74% (SVR – 3.6%) 5.34% 4.9% £999
Two-year tracker Accord 1.99% (base rate + 1.24%) 4.99% 4.4% £995

Source: Moneyfacts. 28 March 2019.

Should you choose a tracker mortgage?

As you can see above, it’s possible to get a very low rate on a tracker mortgage – but you’ll be at the mercy of any rises in the Bank of England base rate.

For example, the lowest price two-year tracker at 60% is 1.44%. While this rate is very low, if we were to factor in a 0.25% rise in the Bank of England base rate, it would become considerably more expensive than the cheapest equivalent fixed-rate deal (1.69% compared to 1.43%).

With this in mind, trackers are only really the right option if you have a high appetite for risk and believe that the base rate won’t rise in the next couple of years.

Find out more: discover the pros and cons of variable rates in our full guide on tracker mortgages.

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