Middleweight mortgage lender Coventry Building Society have announced this week that they will be launching 3 year fixed mortgage products as part of their attempt to draw in mortgage applications during a time of economic uncertainty.
Coventry have said that they are launching these new products as a direct response to requests by borrowers and mortgage brokers who want mid-term mortgage certainty options in case rates increase or drop in the next 24 to 48 months. The products are only offered through the mortgage broker arm ‘Coventry For Intermediaries’ and will allow new borrowers to fix their mortgage for 3 years rather than the relatively short 2 years and the relatively lengthy 5 year standards that other lenders have historically offered.
Why Are They Launching The New Products?
The idea of these new 3 year products is that a borrower can have a safe and secure mortgage product for 3 years and hopefully, if the market has returned to relative normality in three years, they can switch to a lower rate product in the future. The 3 year term will mean that they won’t risk ending their mortgage product too early with a 2 year fix and having to go on to an even higher rate. And, they also wont risk being stuck on a somewhat high rate for 5 years when there could be the potential for a lower rate earlier.
Coventry Building Society have said that the range will match the rates in its current range of two-year products. They have also said that the new loans include a 75% LTV three-year fix, to 28 February 2026, at 3.77%, with a £999 product fee. And a 65% LTV five-year fix rate, to 29 February 2029, at 3.72%, with a £999 product fee.
They have also cut rates on some two and five-year fixes by up to 0.23%. This includes mortgages in its offset range, where borrowers use their savings to offset their mortgage interest. Interest-only mortgage rates have also been reduced by up to 0.26%, while standard buy-to-let rates have been cut by up to 0.32%.
What Do Mortgage Experts Say About A 3 Year Fixed Mortgage
Content and communications manager at Oportfolio mortgages in London, Louis Mason comments:
“I think this is a very smart move from Coventry and something that I think more lenders should start to offer. The main thing on a lot of our clients minds right now is ‘When will rates go down?’ and ‘Can I get a lower rate in the future’. Of course, no one can accurately predict the future of the economy but we have all faith that rates will go down within the next couple of years.
By offering a 3 year fixed product, a sort of middle ground between 2 and 5 year fixes, Coventry has given our clients this re-assurance and flexibility. So that when rates do go down, they will be able to switch to a more appealing lower rate. Only time will tell but I think other lenders should listen up and take a leaf out of Coventry For Intermediaries book.”
If you or anyone you know is worried about mortgage interest rates, or wants to explore what kind of fixed deal might be available to you, please feel free to give our advisor team a call today to see how we can help.