Abbey cuts mortgage rates again

Abbey has announced it will cut the cost of its two and three-year fixed-rate mortgage deals, with effect from Monday.

The company confirmed it is reducing the rates on the deals by up to 0.15 per cent.

Consequently, a two-year fix from Abbey now starts from 6.34 per cent with £999 fee and a three-year fix at 75 per cent loan-to-value (LTV) from 6.29 per cent.

Mortgage lenders have come under criticism in recent weeks for failing to match the Bank of England's rate of interest and demanding ever increasing deposits from borrowers.

However, this is the second cut from Abbey in ten days.

Furthermore, the lender announced it will be adding a new three-year fix at 70 per cent LTV to its range.

This deal has a rate of 5.99 per cent with a £1,695 fee and is available for loans of up to 250,000 GBP.

While the large deposit and fee may deter some borrowers, Abbey claim: "This product is market leading even when considering the fee-adjusted rate."

"Abbey is committed to offering competitive deals and our strength in the mortgage market allows us to do this," said Phil Cliff, Abbey's director of mortgages.

"These rate reductions are the second set that Abbey has made in just ten days. What's more, we've added another market leading deal to the range.

"This three-year fix has a rate of just 5.99 per cent and even when the slightly higher fee is accounted for, it is still best in market."

Chris O'Toole