Lenders Slash Mortgage Rates.

by Mark Johnston

Lenders Slash Mortgage Rates.

It appears that a number of mainstream lenders have cut their mortgage rates in recent weeks and it looks like others will have to follow if they want to remain competitive within the industry.

The Debt Advisory Line is welcoming the news that banks and building societies are slashing the cost of mortgage rates by launching some historically low fixed rate loans.

It seems that Low interbank lending costs are helping to fuel the price cuts as well as the Bank of England’s Funding for Lending Scheme.

Virgin Money has cut rates on its fee saver mortgage range, with the lender now offering a two year fixed rate product up to 70 per cent loan to value (LTV) at 3.19 per cent, this is a reduction of 0.16 per cent.

 Their two year tracker rates have also been reduced to 3.19 per cent, with a three year deal cut to 3.45 per cent. All products in Virgin’s fee saver range come without any arrangement fees.

Nationwide building society has made its third set of rate reductions in four weeks by cutting all fixed and tracker mortgages by 0.10 per cent.

These reductions including a new three year fixed rate deal at 2.99 per cent for new borrowers and 2.89 per cent for existing customers, with a loan to value (LTV) ratio of 70 per cent.

The building society is also offering a five year fix deal at a rate of 3.19 per cent for standard borrowers and 3.09 per cent for existing borrowers, available up to 70 per cent loan to value (LTV). Fees of £999 apply to both products, with a £500 discount especially for first time buyers.

Precise Mortgages has also announced cuts to its rates. The intermediary only lender has opened up some of its range to first time buyers, with its 2.89 per cent two year fix now available up to 75 per cent loan to value (LTV). The lender has also reduced rates by up to 0.60 per cent across its buy to let range and will offer loan to values (LTV) up to 75 per cent on near prime  but to let mortgages.

Lloyds TSB has also cuts a number of its mortgages this week as well as launching a new range of products aimed specifically for buyers keen to purchase property through a shared equity or shared ownership scheme.

Stephen Noakes, the Director of Mortgages at Lloyds TSB, said “By adding these mortgages to our range we are hoping that we will be able to help more people realise their dream of home ownership.”

This new price war comes at a time when various surveys are providing hope for the UK property market.

However some industry experts have warned that while it is great news that banks and building societies may be able to offer cheaper mortgages and loans, once the fixed rate term has ended, home owners could be faced with higher rates, which they have not factored into their budget.


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