Lenders make further cuts

A host of UK mortgage lenders have announced they are to make further cuts in the cost of fixed-rate mortgage borrowing – following recent trends.

Firstly Abbey Mortgages has confirmed it is reducing the rate on its two, three and five-year fixed-rate mortgages by up to 0.30 per cent.

The new rates, effective from Friday, will see a two-year fix at 75 per cent loan-to-value (LTV) down by 0.20 per cent to 5.79 per cent, while a three-year fixed, again at 75 per cent LTV, will fall by 0.15 per cent to 5.79 per cent.

A further five-year fix will decrease by 0.30 per cent, to 5.89 per cent, with a 75 per cent LTV.

Phil Cliff of Abbey Mortgages explained: "These great rates may be part of the reason why fixed-rate mortgages are increasing in popularity with borrowers.

"Our research shows they are three times as likely to choose a three year fixed-rate deal compared with six months ago."

"Overall, approximately 52 per cent would now opt for a fixed rate product if they re-mortgaged tomorrow compared with 47 per cent last month and 35 per cent six months ago."

Lloyds TSB and Cheltenham & Gloucester has also announced, from Thursday September 3rd, mainstream two, three, five and seven-year fixed-rates in the 60 per cent and 75 per cent LTV ranges will be reduced by up to 0.11 per cent.

As a result a two-year fixed-rate deal at 60 per cent LTV now has a rate of 5.54 per cent, but a fee of £1,995. A two-year fix at 75 LTV will have the slightly higher rate of 5.64 per cent, and the same fee of £1,995.

Stephen Noakes, director of marketing at Cheltenham & Gloucester, commented: "This is the fifth reduction we've made to our rates in the past two months giving further help to those looking to remortgage or wanting to buy a new home."

Finally the Yorkshire Bank has confirmed it is to continue to waive arrangement fees for new customers who re-mortgage to its current account mortgages during September 2008.

Gary Lumby, Yorkshire Bank's head of retail said: "Our August fee free offer proved very successful and we are keen to continue to help make mortgages more affordable.

"We know that every penny counts in these cost conscious times and our current account mortgages are a great way to ensure that your money is working hard for you all of the time."

Chris O'Toole