Lenders cut rates and launch best buys
November 24th, 2009 by 
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As further evidence that the mortgage freeze is starting to improve slightly, Cheltenham & Gloucester, part of Lloyds Banking Group, has cut the cost of it’s range of mortgage products and introduced a ‘Best Buy’ product, while Abbey has also launched a market-leading product.
The interest rates charged on C&G’s two-year fixed rate mortgage and its tracker product are available through mortgage intermediaries and have both been reducded by up to 0.5%
C&G has also launched a two-year tracker mortgage product, which is 2.29% above the Bank of England Base rate. Currently priced at 2.79% that is the lowest tracker deal currently on the mortgage market, although it is only available for borrowers with a 40% deposit and a good credit rating. It comes with an arrangement fee of £995.
In a welcome move for first time buyers, C&G has also introduced a two-year tracker priced at 5.99% and reduced the cost of a two-year fixed rate to 6.99%, both available to people with only a 10% deposit.
At the same time Abbey launched a two-year fixed rate mortgage product priced at 3.69% available up to 70% loan to value with a fee of 3.69%, the lowest fix on offer for those with 30% deposit.
A number of other mortgage lenders have reduced the interest rates charged on some of their mortgage products this month, including Northern Rock and Nationwide Building Society.
The moves are indicative of competition beginning to creep back in to the UK mortgage market.
However, average mortgage rates are still higher than they were six months ago. The average cost of a two-year fixed rate deal is now 5.02%, up from 4.61% in April but down from a recent peak of 5.24% in August after lenders hiked their mortgage rates in response to rising swap rates, upon which the deals are mostly based.
There has been some movement in mortgage rates in recent days, with some rates going down and some of the smaller providers putting there rates up. If you go back a few months rates were much better, but we are heading in the right direction.
Posted in Mortgage news | 