Competition in the mortgage market is heating up with the launch of new 0.99 per cent rate deals.
Nationwide Building Society will launch a 0.99 per cent mortgage on Wednesday for home owners looking to remortgage.
The two-year fixed-rate deal will be available for borrowers with a hefty 40 per cent deposit and also has a £1,499 fee.
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 per cent, 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 per cent.
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 per cent they might not be the most attractive in terms of true cost.”