The recent growth in the range of great new short-term mortgage products means that users should switch mortgage to save money, a new report has said.
According to Your Move, remortgaging on one of the newest five-year offers means that customers will be able to access savings at levels never seen before.
“According to the survey, the highest full-term savings are achieved with five-year deals,” Your Move says.
However, borrowers should be aware that new exit fees mean that buying and switching two-year mortgages might not be as cheap as they had hoped.
Your Move said: “Borrowers choosing a two-year fixed-rate deal have to be certain that rates will fall significantly from this point and remain low to make more savings than the five-year rate after repeated arrangement and exit fees.”
The best five-year deals include First Direct’s cheapest-ever discounted variable rate of 2.99 per cent, available until next spring. It says that its one per cent saving thereafter would add up to a £19,800 saving over a 25-year mortgage of £100,000.
Alliance & Leicester has a headline rate of 4.24 per cent, a £395 fee and a five per cent deposit on its two-year deals.
© Adfero Ltd