Alliance & Leicester cuts mortgage costs

Alliance and Leicester (A&L) has announced it will cut the cost of borrowing on its mortgage portfolio, with effect from today.

All but one of the company's mortgage deals will see costs reduced, with cuts of between 0.10 and 0.55 per cent the norm.

Key among the company's new offering is a two-year fixed-rate deal at 5.99 per cent.

The deal comes with a one per cent product arrangement fee (previously two per cent), with a value of up to 75 per cent of the property value or £1 million.

A two-year fixed-rate deal is also on offer, with a rate of 6.19 per cent and a fee of £599.

A new 6.99 per cent (Bank of England base rate plus 1.99 per cent) with no product fees and a maximum of 85 per cent loan-to-value (LTV) or £1 million has also been launched.

"We are reducing the majority of the rates across our mortgage portfolio, which is great news for people looking for a new deal," said Richard Taylor, head of mortgage products at A&L.

"These new mortgage products are available to both new and existing customers, with a number of options to choose from, including deals which benefit from no fees, as well as free valuation and legal fees."

In recent days a host of mortgage lenders have cut their costs, in some cases taking rates back to pre-credit crunch levels.

Royal Bank of Scotland led the way, offering a new two-year fixed rate deal at 6.19 per cent, closely followed by Abbey, who are now offering a 5.89 per cent over the same period.

Announcements from Yorkshire Building Society, Mansfield Building Society, and Britannia Building Society and Leeds Building Society – also confirmed cuts in lending costs.

The new Alliance and Leicester deals will be available via the bank's branches, by telephone at Mortgage Direct and from brokers from today.

Chris O'Toole