Mortgages set to fall below 1%

Rates on market-leading mortgages are set to fall below 1% as competition between lenders intensifies.

Chris Pilling, chief executive of Yorkshire Building Society, said that mortgages are on course to hit fresh all-time lows.

He predicted that the cost of a two-year fixed rate mortgage could soon fall below 1%.

Yorkshire is currently offering one of the cheapest rates on the market, a new two-year deal at 1.14%.

This beat the previous best buy from First Direct, which charges 1.15%.

Pilling said that rates will fall across the range of mortgage terms - including for homeowners wanting to lock in for longer periods.

Simon Tyler, managing director of Tyler Mortgage Management, said: “As lenders battle for business and expectations of a base rate hike are put ever further back, rates can go even lower." 

HSBC has a five-year fixed charging 1.99% work while First Direct offers a 10-year fixed rate at 2.89%.