The rise of the seven day mortgage

One lender is offering fabulous rates, but you'll need to move quickly to get hold of them!

Santander has started an interesting new initiative when launching attractive new mortgages, specifying explicitly that the deals will only be available for seven days.

Just last week it unveiled two fixed rate deals, exclusively available through brokers – a five-year fixed rate deal at 4.99%, fee-free, up to 85% loan-to-value, and a two-year fixed rate at just 2.89%, with a £995 fee, for borrowers with a 40% deposit.

The reasoning behind it is pretty simple. While the lender is keen to maintain, and perhaps even increase its market share of the UK mortgage market – in 2010 it took an 18% share – it doesn’t want to overstretch itself. So by limiting the time that a certain mortgage is available to borrowers, it limits just how much lending it is likely to do on that mortgage, meaning it doesn’t get swamped.

The pulling of mortgages was a big issue a couple of years ago. Brilliant new mortgages would be launched on a Friday, and then pulled by the Monday when the lender had been overrun by applications. By being explicit about exactly how long the mortgage will be around for, it’s a lot fairer on borrowers.

A useful broker!

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That’s where a good mortgage broker comes in useful. Not only can they take advantage of deals which are only available to them (such as those mentioned above from Santander, as well as other non-mainstream lenders), but they will also be kept up to date on exactly when a mortgage is launched, and how long it is likely to be available. That way you know whether you are going to need to act quickly – which may mean less negotiation on the property price for the sake of a better mortgage - or can afford to take your time and haggle a little bit over the offer.

In addition, brokers will have a pretty good idea of what type of borrowers the various lenders are after, and so will know which lenders will be keen for your business, and which are more likely to direct you elsewhere.

You can pick the brains of our fee-free mortgage team over at our mortgage centre, whether by email, over the phone or on instant messenger. You can also use the centre to search the market for yourself, to get an idea of the sorts of deals you may currently qualify for.

The lowest mortgage rates in history

If you’re not in a position to move quickly in order to take advantage of one of these disappearing mortgages, then don’t panic – thankfully the deals that don’t have a limited shelf life are also improving significantly.

According to the latest figures from financial information website Moneyfacts, the average rates on both fixed and tracker rate mortgages are now at their lowest level since the firm started recording rates, way back in 1988.

Here’s how those average rates stack up currently:

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Competitive new deals

What’s more, the last couple of weeks have seen some very competitive new deals launched, with lenders cutting rates left, right and centre. Let’s take a look at some of them.

Northern Rock has cut rates across its range by as much as 0.70%, with a particularly excellent two-year fixed rate deal now at 2.89%, with a £995 fee up to 70% loan-to-value.

The rates at Woolwich have been cut by up to 0.31%, with two new trackers launched. For borrowers with a 30% deposit, you can get hold of a two-year tracker at 1.79% above base rate, with a fee of £999, while there is also a five-year fixed rate deal at 4.98% at 80% loan-to-value.

Chelsea Building Society has unveiled a series of great rates, with its ten-year fixed rate range catching my eye. This is one area of the market which has been horrendously underserved – a couple of months ago there was just a solitary ten-year fixed rate deal – but Chelsea’s look good to me, with a rate of 4.89% and fee of £1,995 if you have a deposit of 40%.

And Yorkshire Building Society has launched a fee-free two-year fixed rate mortgage at 60% loan-to-value, with an interest rate of 2.99%.

Below are some of the best deals in the market today, across a range of different mortgage types and terms.

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Use lovemoney.com's innovative new mortgage tool now to find the best mortgage for you online

At lovemoney.com, you can research all the best deals yourself using our online mortgage service, or speak directly to a whole-of-market, fee-free lovemoney.com broker. Call 0800 804 8045 or email mortgages@lovemoney.com for more help.

This article aims to give information, not advice. Always do your own research and/or seek out advice from an FSA-regulated broker (such as one of our brokers here at lovemoney.com), before acting on anything contained in this article. 

Finally, we tend to only give the initial rate of a deal in our articles, but any deal which lasts for a shorter period than your mortgage term may revert to the lender's standard variable rate or a tracker rate when the deal ends. Before you take out a deal, you should always try to find out from your lender what its standard variable rate is and how it will be determined in the future. Make sure you take all this information into account when comparing different deals.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.