Virgin Money will launch a best buy remortgage rate tomorrow as lenders continue to cut home loan costs – but borrowers will only have seven days to secure it.

The bank is offering an interest rate of 4.9 percent on a five-year fixed term, in what is called a “temporary rate clearance sale.”

It charges a fee of £995 and is only available to new remortgage customers who switch to a different lender and who have a deposit or equity of at least 40 per cent.

The rate is the lowest in the market for remortgage and represents a reduction of 0.25 percentage points on the previous price of the product.

Remortgage deal: Virgin’s 4.9% offer comes as most lenders offer their best rates to homebuyers.

The next cheapest deal is Yorkshire Building Society’s 4.92 per cent, also with a five-year term. It charges a higher fee of £1,495, but is available to those with a deposit of 25 per cent or more.

This comes as lenders have continued to cut mortgage rates at a good pace this week, with several bigger names striking deals below the 5 per cent mark.

A mortgage broker said borrowers should expect “more competitive offers” in the coming months as more settled financial markets had given lenders “confidence” about how loans should be priced.

> Calculate how much a mortgage would cost you each month using our tool

Virgin is also reducing its five-year solution for those with a 70 per cent deposit or capital by 0.25 per cent to 4.95 per cent, again with a fee of £995.

Nicholas Mendes, mortgage technical manager at broker John Charcol, said: ‘It’s been a while since we’ve seen a rate sell-off.

‘This latest Virgin rate of 4.9 per cent on a five-year fixed rate will place it as a market-leading remortgage rate’

‘Mortgage holders have seven days to lock in rates before being taken off the market, and suspect that if Virgin receives more applicants than expected this could be shortened.

“Trying to guess when the market will bottom is virtually impossible, and having a broker on your side will help you navigate lenders’ continued repricing.”

Market movement: Most major lenders have reduced mortgage rates in recent weeks

Also this week, TSB launched a five-year fixed mortgage with an interest rate of 4.89 per cent.

Like most of the cheapest deals on the market, it is only available to homebuyers who must have a 40 per cent deposit. The deal has a fee of £995.

This is not as cheap as Virgin Money’s similar five-year purchase deal, at 4.82 per cent, but it has a higher fee of £1,295 and is only available through mortgage brokers.

Nationwide has also announced a series of rate cuts starting today. Its lowest fixed rate deal is now 4.94 per cent over five years, for new borrowers buying with a 40 per cent deposit, which comes with a fee of £999.

According to financial information service Moneyfacts, the five-year average fix for all deposit sizes was 5.97 per cent at the start of this week.

The typical two-year fixed rate is 6.47 percent.

As the big moves in mortgage rates over the past two years have shown, it’s not always easy to predict where rates will head next.

However, borrowers can find a clue as to where financial markets currently believe rates are headed by looking at swap rates.

These are agreements in which two counterparties, for example banks, agree to exchange a stream of future fixed interest payments for a stream of variable future payments, based on a specified amount.

Mortgage lenders enter into these agreements to protect themselves against the interest rate risk involved in making fixed-rate mortgage loans.

The five-year swap rate currently stands at 4.6 percent. In simple terms, that means financial markets expect five-year fixed mortgages to be priced at that level in 2028. The two-year swap rate is at 5.1 percent.

Experts say this means we’re not likely to see rates fall below the next milestone, 4.5 percent, anytime soon, although rates could still fall further from their current levels.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘Now that swap rates have stabilized and lenders are more confident about where to price their products, we are seeing more innovation and better rates.

‘Many think the base rate is at or near its peak, but even if that were the case, no one can agree on what will happen next: whether rates will stabilize for a while or whether we will see sharp declines. relatively quickly.

“What we do know is that lenders have money to lend and will be watching at the end of the year, so there will be more competitive offers to tempt borrowers in the coming months.”

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate agreement is coming to an end, or because they have agreed to purchase a home, should explore their options as soon as possible.

This is Money’s best mortgage rate calculator, powered by L&C, which can show you offers that match the value of your mortgage and your property.

What happens if I need to remortgage?

Borrowers should compare rates and speak to a mortgage broker and be prepared to take action to lock in a rate.

Anyone with a fixed rate deal ending within the next six to nine months should look at how much it would cost to remortgage now and consider striking a new deal.

Most mortgage agreements allow fees to be added to the loan and then only charged when you take out. By doing this, borrowers can lock in a rate without paying expensive origination fees.

What happens if I am buying a house?

Those with agreed-upon home purchases should also try to lock in rates as early as possible, so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overextend themselves and be prepared for the possibility that home prices may fall from their current high levels as higher mortgage rates limit people’s ability to borrow.

How to compare mortgage costs

The best way to compare mortgage costs and find the right deal for you is to talk to a good broker.

You can use our best mortgage rate calculator to show you deals that match your home value, mortgage size, term, and fixed rate needs.

However, be aware that rates can change quickly, so the advice is that if you need a mortgage, compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you. .

> Check the best fixed rate mortgages that you can request

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