Battle of the five-year fixes: As Tesco Bank launches market-leading mortgage, we compare the best deals for different sized loans

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Tesco Bank has unveiled a range of five-year fixed rate mortgages that match the best buys on the market and may beat them when fees are included.

The lender is offering five year fixes for 60, 80 and 85 per cent loan-to-value, starting at 2.19 per cent. Borrowers also get one Clubcard point for every £4 of their monthly mortgage payments.

Five-year fixed-rate mortgages fell below 2 per cent earlier this year at 1.99 per cent, but have since settled at 2.19 per cent in recent months. 

Five-year fixes: Tesco Bank is offering top deals for long-term fixes

Tesco Bank now matches that rate with a five-year fix at 60 per cent loan-to-value. The offer comes with a £995 fee. A 25-year £150,000 mortgage would cost £649.75 a month and £39,979 over five years.

In comparison, HSBC offers the same rate but with a £999 fee for new buyers. The overall cost would be a slightly higher at £39,983 and you would also miss out on the Clubcard points. 

However, if you are remortgaging, HSBC offers the same rate but with a lower fee of £499. This would take the overall cost down to £39,483 over five years, £496 cheaper than Tesco.

80 per cent LTV

For a 20 per cent deposit, Tesco Bank is offering a five-year fix at 2.59 per cent with a £999 fee.

A 25-year £150,000 mortgage would cost £679 a month and £41,779 over five years.

In comparison, First Direct offers the same rate but with a higher £1,450 fee.

The cost including fees over five years would be £1,372 more expensive than the Tesco deal  at £42,234.65.

85 per cent LTV

Tesco Bank also offers a market low for a 15 per cent deposit.

You could get a five-year fix at 2.79 per cent with a £995 fee.

A 25-year £150,000 mortgage would cost £695 a month and £42,697 over five years

HSBC offers the same rate with a £999 fee, pushing the total cost up to £42,701.

Remortgage customers could also get the HSBC 2.79 per cent rate for a £499 fee, taking the cost lower at £42,201.