Gen H has launched an eye-catching deal: a five-year fixed rate mortgage at a mere 3.94%. This rate hasn’t been seen since May and marks a significant drop. The catch? You’ll need at least a 40% deposit to jump on this deal.

This standout mortgage comes with a £999 product fee and is not just for the first-time buyers, but also for those looking to move homes. With the average five-year fixed rate mortgage hovering around 5.55%, Gen H’s offer is a considerable saving. Let’s put this into perspective: on a £200,000 loan over 25 years, you’re looking at a monthly repayment of £1,049 with Gen H’s deal, compared to £1,234 for the average rate. That’s nearly £200 saved each month!

Gen H’s Commitment to Homebuyers

Pete Dockar, Gen H’s Chief Commercial Officer, expressed his excitement about ending the year on a high note, mirroring their successful start to 2023. Gen H is on a mission to make homeownership a more achievable dream, and these rates could be the helping hand many are hoping for this holiday season.

Why Are Rates Dropping?

There’s a trend here – mortgage rates have been on a downward trajectory in recent months. They’re all significantly below the Bank of England’s base rate of 5.25%. Lenders base their mortgage rates on future market expectations for interest rates, their own lending targets, and competition in the market.

The Science Behind the Rates

A key factor in setting these rates is something called ‘swap rates’. These are benchmarks used by lenders, influenced by long-term predictions for the Bank of England base rate and the overall economy. Currently, five-year Sonia swaps (a type of swap rate) are at 3.4%, while two-year swaps are at 4.07%.

More Good News on the Horizon?

Some experts suggest that Gen H’s trendsetting rates are just the beginning. We might see more sub-4% rates as we enter the New Year, with lenders likely to adjust their rates in early January after the holiday season.