Three more lenders cut mortgage rates
Published by Jane Gething-Lewis for 24dash.com in Housing and also in Bill Payments
Mortgage lenders 'Hopeful' on fixed rate switch
Mortgage rates continued to come down today with three more lenders cutting the cost of their home loans.
Nationwide Building Society, the Co-operative Bank and Yorkshire Building Society are all reducing their rates following a fall in wholesale funding costs.
The biggest reduction in the Nationwide range is to its five-year fixed-rate mortgage for people buying a new home, who pay a higher arrangement fee, with rates on this range being cut by 0.3%, although the fee is being increased from £1,499 to £1,999.
Two-year fixed-rate loans across the group's range are being cut by 0.1% from Friday, while two-year trackers for people remortgaging are being cut by 0.05%, although the cost of arranging one of the higher fee deals is also being increased from £1,499 to £1,999.
The group is also launching a new range of two-year fixed-rate mortgages with a £999 arrangement fee, starting at 5.58% for people with a 40% deposit.
Matthew Carter, Nationwide's director of mortgages, said the group would continue to look for opportunities to make further reductions to its range where possible.
Yorkshire Building Society is cutting its Fresh Start mortgage, aimed at people who are divorced or separated, by 0.5%, while it is also reducing its two, three and five-year fixed-rate loans by 0.15%, to give a new rate of 5.59% for borrowers with a 25% deposit.
The group has also halved the arrangement fees on its mainstream products to £495 from £995.
The Co-operative Bank is cutting the cost of its three and five-year fixed-rate mortgages for people borrowing 75% of their home's value by 0.3% and 0.7% respectively from September 15.
Mortgage rates have been falling steadily in recent weeks as lenders pass on reductions in swap rates, upon which fixed-rate deals are based.
Figures released by the Bank of England yesterday showed that the average cost of two and five-year fixed-rate mortgages for borrowers with at least a 25% deposit fell for the second month in a row during August, dropping by 0.27%.
But the drop was less pronounced for people with smaller deposits, with a five-year fixed-rate mortgage for someone borrowing 95% of their home's value decreasing by just 0.05% to an average 7.09%.
Ten of the UK's 12 biggest lenders have cut their two or three-year fixed-rate deals at least once during the past two weeks, as lenders once again fight for business.
A number of lenders have also launched two-year fixed-rate mortgages with rates of less than 5%, although many of these come with hefty arrangement fees.
The average cost of a two-year fixed-rate mortgage recently returned to its pre-credit crunch level, although the Bank of England base rate is now 0.75% lower than it was a year ago.