Money News

Co-op Bank has cheapest tracker mortgage

Competition in the mortgage market is heating up with a new tracker from Co-operative Bank and Britannia.

The Co-operative Bank and Britannia are launching a new tracker mortgage, which they claim is the cheapest on the market.

The lenders are bringing out a three-year tracker mortgage at 2.49% (1.99% over the Bank of England base rate) for deals up to 75% loan-to-value (LTV).

The tracker rate rises to 3.19% (2.69% over base rate) 85% mortgages.

Britannia and the Co-operative Bank, which merged last summer, are also bringing out a five-year capped rate mortgage.

The 75% LTV deal starts at 2.99% (2.49% over base rate) but is capped so it will not rise over 5.99%, should the Bank of England hike rates over 3.5%.

At 85% LTV, the capped mortgage offers a rate 2.99% over the base rate, which won’t go over 6.49%.

Both mortgages come with £999 fees.

John Hughes at Britannia and the Co-operative Bank said: “These competitively priced variable rate mortgages offer customers an opportunity to take advantage of the current low interest rate environment and follow on from the recent launch of our best buy fixed rate products.

“The five-year capped product is innovative in the current mortgage market, offering customers the best of both worlds - a low current rate and also the reassurance that their payments won't go above a certain rate for the next five years.”