First ever sub-1% five-year mortgage fix launched by Nationwide

MSE_Kit

Nationwide has launched a five-year fixed mortgage deal at 0.99% – the first time interest rates on a five-year deal have EVER dropped below 1%. While mortgage interest rates have been continually creeping down over recent months, Nationwide's latest deal is another reminder of the fierce competition between lenders. So there's no better time to check if you could save £1,000s on your mortgage now.

Read the full story:

First ever sub-1% five-year mortgage fix launched by Nationwide - check if you can you take advantage of record low rates

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FirstTimePlx

"

This new mortgage is only available if you've got at least a 40% deposit or equivalent equity in your home – plus the fee is expensive

"

I am going to assume that this will stump if not most of the applicants. Only for a select few.

Not to mention, must borrow a minimum of £275K or £300K (re-mortgage) on an average property price of £458,000.

Property price above the norm for most applicants too.

ukri

Crazy how rates are still falling. Apparently the cheapest EVER 5 year fix. Nuts.

getmore4less

Break even tables for no fee (nationwide no fee is 0.3% more)

	Mortgage amount, no fee rate needed
Full term	£25,000	£100,000	£150,000	£200,000	£300,000
5	3.473%	1.591%	1.389%	1.289%	1.189%
10	2.660%	1.396%	1.260%	1.192%	1.124%
15	2.494%	1.356%	1.233%	1.172%	1.111%
20	2.423%	1.339%	1.222%	1.164%	1.106%
25	2.384%	1.330%	1.216%	1.159%	1.103%
30	2.358%	1.324%	1.212%	1.156%	1.101%
term	rate difference, mortgage size needed
	0.10%	0.20%	0.30%	0.40%	0.50%
5	£594,603.73	£297,062.91	£197,882.92	£148,293.12	£118,539.41
10	£401,630.23	£200,519.71	£133,483.26	£99,965.32	£79,854.79
15	£362,395.03	£180,877.90	£120,372.59	£90,120.24	£71,969.07
20	£345,528.19	£172,432.75	£114,734.68	£85,885.95	£68,576.96
25	£336,153.19	£167,738.38	£111,600.53	£83,531.91	£66,690.98
30	£330,191.56	£164,753.08	£109,607.33	£82,034.76	£65,491.47
IO	£307,404.89	£153,702.44	£102,468.30	£76,851.22	£61,480.98

and the same table against a £999 fee.

	Mortgage amount, £999 fee rate needed
Full term	£25,000	£100,000	£150,000	£200,000	£300,000
5	1.795%	1.189%	1.123%	1.089%	1.056%
10	1.533%	1.125%	1.080%	1.057%	1.035%
15	1.480%	1.111%	1.071%	1.051%	1.030%
20	1.457%	1.106%	1.067%	1.048%	1.029%
25	1.444%	1.103%	1.065%	1.046%	1.027%
30	1.436%	1.101%	1.064%	1.045%	1.027%
term	rate difference, mortgage size needed
	0.10%	0.20%	0.30%	0.40%	0.50%
5	£198,333.47	£99,087.03	£66,004.98	£49,464.02	£39,539.50
10	£133,966.06	£66,884.49	£44,524.10	£33,344.00	£26,636.02
15	£120,878.93	£60,332.86	£40,150.97	£30,060.12	£24,005.70
20	£115,252.90	£57,515.93	£38,270.41	£28,647.75	£22,874.23
25	£112,125.82	£55,950.10	£37,224.99	£27,862.54	£22,245.16
30	£110,137.28	£54,954.33	£36,560.15	£27,363.16	£21,845.05
IO	£102,536.66	£51,268.33	£34,178.88	£25,634.16	£20,507.33

For nationwide they have a 1.04% with £999 fee (0.05% difference).
breakeven needed between the two NW fee options.

term	size needed
5	£396,826.54
10	£268,129.46
15	£241,971.37
20	£230,727.14
25	£224,477.55
30	£220,503.49
IO	£205,073.30

there will be a bunch of borrowers not eligible for the 0.99% that could benefit but mortgage is too small. 

JonMitchell

FirstTimePlx said:

"

This new mortgage is only available if you've got at least a 40% deposit or equivalent equity in your home – plus the fee is expensive

"

I am going to assume that this will stump if not most of the applicants. Only for a select few.

Not to mention, must borrow a minimum of £275K or £300K (re-mortgage) on an average property price of £458,000.

Property price above the norm for most applicants too.

If you look closely and calculated the difference between this 0.99% (fee £1499, min loan £275K) vs 1.04% (fee £999, min loan £25K) from Nationwide. The difference over a 5 year period for example is negligible, only a £125 difference between the two products. Therefore the sub 1% might be for a smaller audience but if one look at other products from the same lender, one is not losing much at all. 

Don't be tempted by 0.xx% without calculating the small prints    

getmore4less

JonMitchell said:

FirstTimePlx said:

"

This new mortgage is only available if you've got at least a 40% deposit or equivalent equity in your home – plus the fee is expensive

"

I am going to assume that this will stump if not most of the applicants. Only for a select few.

Not to mention, must borrow a minimum of £275K or £300K (re-mortgage) on an average property price of £458,000.

Property price above the norm for most applicants too.

If you look closely and calculated the difference between this 0.99% (fee £1499, min loan £275K) vs 1.04% (fee £999, min loan £25K) from Nationwide. The difference over a 5 year period for example is negligible, only a £125 difference between the two products. Therefore the sub 1% might be for a smaller audience but if one look at other products from the same lender, one is not losing much at all. 

Don't be tempted by 0.xx% without calculating the small prints    

depends on the amount borrowed and the term(payment)  what the difference will be.

for the cut off of £275k over various terms using the same payment adding the fees the higher fee is better by.
09 -£4
10 £15
15 £74
20 £103
25 £120
30 £132
35 £140
IO £182

JonMitchell

getmore4less said:

JonMitchell said:

FirstTimePlx said:

"

This new mortgage is only available if you've got at least a 40% deposit or equivalent equity in your home – plus the fee is expensive

"

I am going to assume that this will stump if not most of the applicants. Only for a select few.

Not to mention, must borrow a minimum of £275K or £300K (re-mortgage) on an average property price of £458,000.

Property price above the norm for most applicants too.

If you look closely and calculated the difference between this 0.99% (fee £1499, min loan £275K) vs 1.04% (fee £999, min loan £25K) from Nationwide. The difference over a 5 year period for example is negligible, only a £125 difference between the two products. Therefore the sub 1% might be for a smaller audience but if one look at other products from the same lender, one is not losing much at all. 

Don't be tempted by 0.xx% without calculating the small prints    

depends on the amount borrowed and the term(payment)  what the difference will be.

for the cut off of £275k over various terms using the same payment adding the fees the higher fee is better by.
09 -£4
10 £15
15 £74
20 £103
25 £120
30 £132
35 £140
IO £182

Agreed.

I was just replying to FirstTimePlx point that the 0.99% would stump most and meant for only a selected few. The 1.04% is for eg  only £125 different from the 0.99% over a 5yr period, when calculating the amount of interests + fee paid.

I tend to always do the maths myself to double check before approaching my mb for further advise

SJ_

I expect very little sympathy here aside from people living in London and the commuter belt but what this article doesn't say is that the offer caps borrowing at £1m...which isn't mentioned anywhere and took time to find out. I haven't done the numbers but taking into account the higher arrangement fee and the capped borrowing...is it a PR stunt over value?

getmore4less

Product transfer also available with the £999 fee over £1m

JonMitchell

SJ_ said:

I expect very little sympathy here aside from people living in London and the commuter belt but what this article doesn't say is that the offer caps borrowing at £1m...which isn't mentioned anywhere and took time to find out. I haven't done the numbers but taking into account the higher arrangement fee and the capped borrowing...is it a PR stunt over value?

If you look at this 0.99% and they next in line product of 1.04%, there is little difference over the period of lending in terms of amount of interests + product fee paid.

While 0.99% would appeal to those with a LARGER mortgage above 300K, for those who needs between 25K and above will be better off using the 1.04%.

Just do a simple math cal and one can easily see the marketing smoke screen. It lender's competition , which I think it will continue unless there is an interest rate hike - please dont go there! 

getmore4less

JonMitchell said:

SJ_ said:

I expect very little sympathy here aside from people living in London and the commuter belt but what this article doesn't say is that the offer caps borrowing at £1m...which isn't mentioned anywhere and took time to find out. I haven't done the numbers but taking into account the higher arrangement fee and the capped borrowing...is it a PR stunt over value?

If you look at this 0.99% and they next in line product of 1.04%, there is little difference over the period of lending in terms of amount of interests + product fee paid.

While 0.99% would appeal to those with a LARGER mortgage above 300K, for those who needs between 25K and above will be better off using the 1.04%.

Just do a simple math cal and one can easily see the marketing smoke screen. It lender's competition , which I think it will continue unless there is an interest rate hike - please dont go there! 

The benefit(£1499 v £999) kicks in at around  £205k for interest only and by 9 year term gets to around £275k.

Going to be plenty between £220k and £275k that would benefit if they were eligible.