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More lenders cut mortgage rates and fees

Britannia and Co-op are latest to cut rates
A for sale sign

Two more mortgage lenders have cut rates or are set to launch competitive new products this week, in a further sign that some people looking to re-mortgage or buy a property increasingly have a better variety of home loans to choose from.

Britannia and The Co-operative Bank are reducing mortgage rates by up to 0.25%, and from Friday 16 April will offer several new mortgage products including a five-year fixed-rate mortgage at 4.49%. This deal will be available up to a maximum loan-to-value (LTV) ratio of 75%.

Since the start of 2010, the availability of mortgages for people with substantial deposits has steadily improved. However, those who are unable to save up at least 15% of their property’s value are still unlikely to be eligible for the cheapest deals.

Mortgage fees

Britannia and The Co-op are also offering a fee-free option on their two-year fixed-rate mortgage. It comes with a rate of 4.19% at 75% LTV, or 4.99% at 85% LTV.

Meanwhile, Chelsea Building Society has launched a range of arrangement fee-free mortgages specifically aimed at borrowers who need mortgages at up to 85% LTV. Two-, three- and five-year fixed-rate deals are available with no arrangement fee, as is a two-year tracker mortgage.

Tim Taylor, Chelsea’s head of customer service, commented: ‘For a borrower in today’s market, getting a deposit alone is tough. Hidden extras like fees and charges can hurt. We’re delighted that this range really does offer a genuine alternative to banks.’

Find the best mortgage rates on the market

Which? property and mortgages expert Cathy Neal said: ‘Once again, lenders are cutting rates and getting creative with the incentives they offer potential customers – and this is good news for consumers.

‘However, the variety of options out there can be confusing, and it’s important to do your homework before signing up for any mortgage deal. Bonuses such as the waiver of mortgage arrangement fees are attractive, but it’s important to work out the total cost of all the mortgage deals you’re interested in before choosing one; you might be surprised by what your sums show.’

The Which? mortgage calculator takes the hassle out of comparing mortgage deals by taking account of rates, fees and charges to help you make an informed decision about your home loan. You can find out more about the different types of mortgages on the market by reading our Mortgage deals explained and Mortgage basics advice guides.

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