Is Now the Time to Switch? Major Lender Offers New 5-year Fix with No ERCS

Mortgage rates are at their lowest since 2021, but consumers are stumped over whether now is the time to commit to a new deal.  

A major lender has released an innovative new product allowing customers the ability to lock in the market’s current rates, but flexibility to switch products two years in.  

It’s rare to come by a competitive mortgage product without early repayment fees, and it’s also available with a 10% deposit and a £500 cashback incentive.  

The options currently available are: 

• 85% LTV at 5.14% 

• 90% LTV at 5.27% 

This product offers a ‘best of both worlds’ approach to an issue that borrowers are currently facing. It looks like mortgage rates will drop in the coming months, but with a recession looming over the UK economy, borrowers may be wary of switching to a tracker mortgage. 

The mortgage market has seen vast instability since 2020, so this product may be a welcome offering for individuals who want to lock in the market’s current rates, but who are still holding out hope that interest rates will drop further. 

In the wake of the Bank of England’s recent base rate freeze, many lenders are dropping their rates, but there’s a level of uncertainty regarding whether they will continue to drop, and by how much. 

Related: Best Place to Invest in Property 2024 Revealed

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What Does this Mean for the Market? 

Bank of England governor Andrew Bailey remains certain that inflation will decrease to 2%, so it’s unlikely that the base rate will budge by much until that goal is met.  

Major lenders seem at odds regarding the market forecast. One large bank has upped its mortgage rates, and with other lenders, we’ve seen residential rates drop below 4% for the first time since 2021.  

While the economy is still unstable, lenders offering increasingly low rates could be a light at the end of the tunnel over a year into the cost-of-living crisis.  

What Do the Experts Say?

George Abouzolof 
Senior Finance Broker CeMAP 

How to Apply for this Product 

At Clifton Private Finance, we have access to the best deals on the market. Our team of brokers can give you tailored advice on your options and put you in touch with the lender that best suits your needs.  

We have relationships with high street, private and specialist lenders offering market-leading deals and bespoke finance solutions. 

To see what we can do for you call 0203 900 4322 or book a free consultation below. 

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