Pistols at dawn as mortgage lenders cut rates
Published: 15/06/2011
Competition is heating up as lenders reduce their rates and introduce new products to the market.
The moves come as the latest LSL House Price Index illustrated a slight increase in property prices in May¹, signifying the market is beginning to stabilise.
High street banks, Santander and NatWest have both enhanced their lines by launching new mortgages while Nationwide and Co-operative have introduced lower rates and fees. Skipton Building Society has also got into the game and launched, what they claim to be, a market leading fixed rate buy to let mortgage.
Welcome to the market
NatWest have two new products; a two-year fixed rate buy-to-let mortgage which is available up to 60% LTV at 5.39% with a £999 fee and a fee-free tracker purchase mortgage which, again, is available up to 60% LTV at a rate of 2.95%².
Santander, meanwhile, is offering a host of new mortgages including a two-year tracker at 2.99%, available up to 70% LTV for remortgagers and a three-year fixed rate of 4.99%, available up to 85% LTV for homebuyers plus a £995 fee³.
And the competition doesn’t stop there. The Mortgage Works is now offering a two-year fixed at 2.59%, or a two-year tracker at 2.99%, capped at 3.99%, both available up to 70% LTV plus a 2% arrangement fee for purchase and remortgage as well as two-year fixed at 3.59% plus a free standard valuation fee, £250 cash back and a £595 fee for remortgage4.
Slashed
But it isn’t just an influx of new products that are cranking up the competition in the property market; many lenders are reducing rates of existing schemes.
Nationwide Building Society has cut the rates on two of its two-year, 50% LTV, mortgages by 0.15% to 2.99% and 3.39%5 while the Co-operative have cut rates by up to 20 basis points (BPS) for buy to let mortgages and up to 60 BPS for its mainstream products6.
NatWest, as well as introducing the two new products, have also reduced rates on a selection of their existing range including its two-year fixed, available up to 75% LTV, from 3.94% to 3.65%².
Turning a corner?
Hopefully these new products and slashed rates are a sign lenders are relaxing their strict and demanding requirements that have thwarted potential homebuyers in the past few years.
Sources
¹Today’s Conveyancer (June 2011)
² Mortgage Strategy (June 2011)
³My Introducer (June 2011)
4Mortgage Strategy (June 2011)
5Financial Times (June 2011)
6My Finances (June 2011)
Content correct at time of publication