Remortgaging? Tesco Bank has launched a market-leading 1.68% five-year fix

Tesco Bank has launched the new lowest five-year fixed-rate mortgage on the market – at 1.68% with a £995 fee if you borrow 60% of your home's value when you remortgage.
It's the cheapest deal out there for those looking to remortgage their home, according to David Hollingworth, associate director at broker L&C Mortgages. But it's not available to buyers.
The next most-competitive five-year fix is from HSBC at 1.69% – which is available to buyers and those looking to remortgage. This HSBC deal remains the cheapest mortgage on the market for purchasers.
While the Tesco Bank deal's the cheapest five-year fix on the market currently, it's not the cheapest ever. In April Atom Bank launched a record-breaking 1.29% deal, though it was short-lived.
If you're thinking of a five-year fix or any other mortgage, download our FREE 2017 guides for Remortgaging or First-Time Buyers which explain all the key info. And benchmark Tesco's deal against the other best deals with our Mortgage Best-Buys tool.
Mortgage market 'competitive'
Mr Hollingworth said: "One of the benefits of the Tesco Bank remortgage is that it comes with free valuation and free basic legal work which could save those looking to remortgage around £200 to £300 on the valuation and around £300 for basic legal work.
"HSBC's 1.69% five-year fix is available for purchase and remortgage and offers free legal work but charges for valuation.
"This shows how competitive lenders are in trying to undercut each other. Tesco Bank nibbles a bit below HSBC to take the crown of the lowest five-year-fix rate on offer. It's a good remortgage rate but borrowers need to factor in incentives and fees when deciding the best package for them."
Tesco Bank mortgage customers can also collect one Clubcard point for every £4 on their monthly repayments. See our Boost Tesco Vouchers guide for how to make the most of your points.
Tesco Bank cuts two-year remortgage rate
Tesco Bank has also reduced the rate on one of its two-year-fix remortgage deals at 60% LTV to 1.53% with no fee. LTV, or loan to value, is the proportion of your property's value you're borrowing. For example, £90,000 on a £100,000 property is 90% LTV.
On our Mortgage Best-Buys tool, this is the cheapest two-year fix with no fee, just undercutting HSBC's 1.54% also at 60% LTV, for buyers and those looking to remortgage. While no fee is attractive to borrowers, there are a number of lenders currently offering lower rates than Tesco Bank and HSBC.
The current market leader for a two-year fix at 60% LTV is Yorkshire Building Society, with a rate of 0.99%, although it carries a £1,495 fee.
Mortgage fixes best for budgeting monthly payments
Whether for two or five years, mortgage fixes are best for those who have no plans to move for the duration of the fix and want the security of knowing what their monthly mortgage payments are going to be over that period.
The risk is that if you exit the deal early – should you need to move to work overseas, for example, you can end up paying a pricey penalty of up to 5% of your outstanding mortgage in many cases. And while you may be able to move your mortgage to another property, you may have to also pay a higher interest rate on new borrowing. See Fix vs Variable help.