According to research by MoneyExpert.com, only a few lenders now offer products below 5 per cent, with the average application fee on these products standing at £2,062.
Sean Gardner, chief executive of MoneyExpert.com, said: “Fixing your mortgage rate at under 5 per cent was a real possibility in the Summer of last year. If you did your research you’ll have found four and even five-year fixed rates under the magic 5 per cent mark.
“However as rate rises continue, lenders have had to react by offering less attractive deals, particularly on fixed rate mortgages. There are still some good products out there but none of the 5 per cent club will tie you in for longer than two years and with such hefty application fees you may be better seeking out a slightly higher rate.”
The number of sub-5 per cent deals is set to continue falling as interest rates are expected to only head upwards over the coming months.
Paul Fincham, senior media relations officer at Halifax, said:
“The price of two and five-year money has crept upwards and most lenders have already repriced, leaving a fairly limited amount of deals near to 5 per cent. If rates go up, you can never say never over 5 per cent as it’s an incredibly competitive market, but people’s monthly repayments will increase.”
