New TSB Five Year Fixed Rate Mortgage at 3.89%

by | Monday 17th Apr 2023 | Mortgage News

This morning TSB have announced a slew of changes to the products they offer to borrowers, including a new five year fixed rate mortgage at below 4%! Something that most lenders haven’t offered since before the announcement of the disastrous mini-budget in September 2022, and the subsequent disruption to the mortgage and property market. In this article we will go through the specific changes that TSB have announced and how this could benefit potential borrowers and existing mortgage owners.

Five Year Fixed Rate Mortgage Below 4%

It almost seems like a mythical beast at times, the idea of getting a sub-4% mortgage in 2023. But, it seems that TSB will shortly be offering a new five year fixed product that is exactly that! Since mortgage rate sky-rocketed at the end of 2022, many lenders levelled out their mortgage rate offering at around 4% or higher. But, in a message to brokers this morning, TSB have announced that they will be joining the club of only a handful of lenders who offer rates beginning with a 3 currently.

Not too much has been made public about the new product yet, but it will be available from the 19th of April 2023 onwards. The rate itself will be set at a very competitive 3.89% fixed for 5-years. The lender has also announced that this product will only be available for residential mortgages for current borrowers looking to switch products. The product will be a maximum of 60% LTV (60% of the value of the property can be mortgaged) and will come with a £999 fee. So, hypothetically a current TSB borrower on a rate of 5% for example, could potentially switch their product to a new 5-year fixed rate at 3.89% subject to through mortgage advice and guidance.

Other Mortgage Rate Changes From TSB

In the same notification to brokers, TSB also announced some more changes to their current product offerings. Here is a breakdown of what they have said so far.

For product transfer applications, TSB are reducing rates:

  • 2 and 5 Year Fixed 0-75% LTV Buy to Let, by up to 0.45%
  • 2 and 5 Year Fixed 0-90% LTV Residential, by up to 0.50%
  • 10 Year Fixed Residential, by up to 0.65%

For additional borrowing, they are also reducing rates:

  • 2 and 5 Year Fixed Buy to Let, by up to 0.45%
  • 2, 5 and 10 Year Fixed Residential, by up to 0.65%

Due to the increase of the Bank of England base rate, TSB will be making the following rate increases:

  • All Tracker products, rates increased by 0.25%
  • Homeowner Variable Rate increased to 7.74%
  • Buy to Let Variable Rate increased to 8.59%

What Do Mortgage Brokers Think?

Content and Communications manager Louis Mason from Oportfolio mortgages had this to say about TSB’s news:

“As mortgage brokers and advisors, it is important that all of our team at Oportfolio HQ are up to date with any rate changes and improvements that happen. When TSB announced the new changes coming to their products and more importantly the five year fixed rate mortgage at 3.89%, we were all very excited.

Most brokers assumed that, at least for the foreseeable future, that rates would stay firm at about 4% or perhaps just below. Although still at the higher end of 3%, this new product signals a good sign for future rate reductions. If lenders are already dropping rates below 4%, what could we see within the next 12 to 18 months?”

If you or anyone else you know is interested in these new five year fixed mortgage rates from TSB or any other new mortgage application, please give our team a call today. We are here to help, and an initial telephone mortgage consultation with one of our advisors is free of charge.

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If you have any questions about UK mortgage news or or anything you’ve read then please get in touch. We’d love to hear from you.

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