Three major mortgage lenders have reduced rates for home buyers and re-mortgagors this week, signalling good news for some people hoping to purchase a property or obtain a new home loan.
Effective from today, the Post Office, Nationwide and Woolwich (the mortgages arm of Barclays bank) have made cuts to some tracker and fixed-rate products – moves taken by some commentators as a sign that the mortgage market, badly constricted after the credit crunch, is continuing to ‘loosen’.
However, most of the rate cuts announced apply to mortgages at a loan-to-value (LTV) ratio of no more than 80%. This means many first-time buyers who are unable to amass large deposits won’t benefit from the rate reductions.
Lower mortgage rates
The Post Office, which has already reduced its mortgage rates three times this year, has cut the rates payable on its two- and five-year fixed-rate mortgage deals at 65%, 75% and 80% LTV. It is now offering a two-year fixed-rate mortgage at 3.15% (maximum LTV 75%), and a five-year fixed-rate at 4.84% (maximum LTV 80%).
Meanwhile, Woolwich has made cuts to its fixed-rate and tracker mortgages, reducing rates by an average of 0.30%. The largest reductions have been made to mortgages with a maximum LTV of 75%.
The lender has also launched a new lifetime tracker mortgage, priced at 2.49% (Barclays base rate + 1.99%, available to borrowers at a maximum LTV of 70%).
Nationwide has cut 29 mortgage rates across its tracker and fixed-rate range. The biggest reduction has been made on its two-year fixed-rate deal, available to remortgage customers up to an LTV of 70%.
Which? mortgage calculator
Which? property and mortgages expert Cathy Neal said: ‘It’s certainly good to see lenders engaging in some competition on rates, as the result should be a better deal for mortgage customers.
‘However, while there has recently been a small increase in the number of mortgages available for home buyers with deposits of 10%, it’s no great surprise that the rate cuts we’ve seen announced over the past few days don’t extend to those borrowers.
‘When looking for a new mortgage, it’s key to shop around for the best deal; don’t just accept the best offer of your bank or building society without looking elsewhere. In addition, make sure you compare the total cost of any mortgage you’re considering. The Which? mortgage calculator could help you do this as it takes into account the fees and charges that might push up the overall price of your home loan.’
To compare the best mortgage rates on the market, check out the Which? mortgages review.
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