Accord has reduced the rate of its 10-year fix at 65% loan-to-value by 0.20%, which is now at 2.49% to match HSBC and First Direct and to meet a rising demand for longer-term fixed rates.
The demand for longer-term mortgages increased across the intermediary market last year, with the proportion of completions on fixed term mortgages of 10-years and over rising by 39% from January 2017 to December 2017.
Whilst 10-year options only represent a small percentage of the overall mortgage market, borrowers’ appetite to secure a great rate for longer is also demonstrated in the proportion of completions for 5-year fixed rate mortgages. This rose by 70% from January 2017 to December 2017.
Aaron Strutt, production and communications director at Trinity Financial, said: “I think some brokers want more competitive longe- term fixed rates and the lenders that have been offering the cheapest deals have been pretty popular with them.
“I think there’s more of a demand for 10-year fixes and soon brokers may be after 15-year fixes too.
“This is quite cheap and matches HSBC and First Direct who are going to be withdrawing some of their rates, though I’m unsure if this includes 10-year fixes. I think on Monday Accord’s rates will near enough be a market leader.”
Phil Mabb, property finance broker, added: “It looks like a good deal but it depends on what their criteria is and whether there are high early payment charges.”
Ben Merritt, mortgage manager at Accord, said: “Borrowers are seeking security during economic and political uncertainty so it’s no surprise that homeowners want to fix for longer.
“Homeowners have been fortunate not to experience a rate rise in almost 10 years, and may have been unsettled last autumn by the first of what is predicted to be many.
“They are making a shrewd decision by fixing for a decade and must be confident that they can afford what they are paying in monthly repayments now for the entirety of that deal period.
“As applications for 10-year fixes are gaining momentum we have reduced the rate on our decade-long deal which we hope will appeal to brokers who are helping clients to find a competitive long-term option.”
Accord’s 10-year fix at 2.49% is available from Monday 26 March and comes with a £995 product fee and free standard valuation.
Accord has also reduced rates on 27 mortgages across its 75%, 80%, 85% and 90% loan-to-value range by up to 0.25%.