Fixed-rates tumble across the board

Friday, 29 August 2008 12:00 AM

A host of mortgage lenders have announced they are to cut the cost of fixed-rate mortgage borrowing, offering some respite to borrowers.

Firstly Woolwich - the mortgage lending arm of Barclays - is cutting 0.28 per cent from the cost of three-year fixed-rate deals.

As a result those wishing to borrow up to 60 per cent loan-to-value (LTV) will have access to a rate of 5.69 per cent, while an LTV of 80 per cent can be obtained for 6.19 per cent.

Cuts of up to 0.18 per cent will be made to the range of five-year fixed-rate mortgages, now starting at 5.79 per cent, and the longer term ten-year fixed-rates, now available at 5.69 per cent.

At the end of the fixed rate period all of these mortgages revert to a rate of 0.95 above base (currently 5.95 per cent) for the remaining life of the mortgage.

"Funding costs for fixed rate mortgages are coming down and competition is hotting up so we have taken the opportunity to reassert our position as one of the most competitive lenders in the market place by cutting the cost of our fixed rate mortgages," said Chris Keane, head of mortgage products at Barclays.

Over at Britannia rates on a two-year fixed-rate mortgage have been cut by a further 0.2 per cent, following a cut late last week.

Following the change a two-year deal can be had for 5.44 per cent for a maximum LTV of 75 per cent. This, however, comes with an arrangement fee of £999.

A lower fee of £499 will secure borrowers a rate of 6.19 per cent, with a maximum 75 per cent LTV, or 6.59 per cent if a 90 per cent LTV is required.

Finally, a fee free two-year fixed-rate deal comes with a rate of 6.14 per cent and a maximum LTV of 50 per cent. This product is likely to appeal to remortgagers, and comes with free valuation and free conveyancing for remortgage customers.

Tim Franklin, managing director of member business at Britannia, said: "Borrowers opting for one of our new two-year fixed-rates have a choice of options, depending on the size of their deposit.

"Whichever option they choose, they will have the reassurance that their payments will stay the same for the next two-years."

Finally Abbey - which recently became the largest provider of new mortgages in the UK - is introducing a new range of low fee mortgages at 60 per cent LTV.

From Monday September 1st three new deals will be launched, all with a fee of £499 and a maximum value of £250,000.

As a result, a two-year tracker at 5.94 per cent will enter the market, along with a two-year fixed-rate deal at 5.79 per cent and a three-year fix at 5.84 per cent.

In addition, Abbey is cutting rates again on its two and three-year fixed-rate deals at 70 per cent LTV for loans of up to £250,000.

Both deals are now available at 5.69 per cent.

This is a cut of 0.2 per cent on the two-year deal, which has a fee of £995; and a cut of 0.1 per cent on the three-year deal, which has a fee of £1,295.

"Abbey is committed to offering a choice of mortgages so our customers can choose the most suitable deal for their needs," explained Abbey's head of mortgages, Phil Cliff.

"The new low fee options coming into the range on Monday suit people remortgaging.

"They will be great for people who have plenty of equity in their property and want a really competitive deal, while looking to keep remortgage costs to a minimum," he concluded.

Chris O'Toole

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