New 0.99% mortgage deals launched as competition in market heats up

Competition in the mortgage market is heating up with the launch of new 0.99% rate deals.

Nationwide Building Society will launch a 0.99% mortgage on Wednesday for home owners looking to remortgage.

The two-year fixed-rate deal will be available for borrowers with a hefty 40% deposit and also has a £1,499 fee.

Henry Jordan, Nationwide’s director of mortgages, said: “We are pleased to be able to launch a sub-1% rate for those looking to remortgage.”

The society said it is also reducing rates on other selected mortgages by up to 0.20 percentage points, including some products for first-time buyers.

The changes were announced as financial information website Moneyfacts.co.uk said signs of competition are starting to show in the mortgage market generally, with home owners potentially saving thousands of pounds if they switch from a standard variable rate (SVR) mortgage.

The average SVR across the market is 4.41%, according to Moneyfacts. Borrowers end up on their lender’s SVR when their initial mortgage deal ends.

The average two-year fixed-rate mortgage across all deposit sizes is 2.58%.

Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “The situation appears to be starting to change for the better in recent weeks as both rate competition and product volumes are starting to return.”

She added: “The best deal will also depend on the overall package, so whilst there are some two-year fixed mortgages priced as low as 0.99%, they might not be the most attractive in terms of true cost.”