Mortgage Rate Cuts: RBS, Abbey and NatWest all drop rates

Royal Bank of Scotland (RBS) which include NatWest have announced that they will be reducing several of its mortgage rates on fixed terms by between 0.35 percent and 0.6 percent. Abbey National Building Society has also said they will be lowering its three-year deal offering a new rate of 5.39 percent, with this deal you do need to have 25 percent deposit of the purchase price.

It’s likely that other lenders will follow suit within the next week or so due to the sharp drop in swap rates, which prompted Abbey and RBS to make the cuts on their fixed rate loan deals. Swap rates are what fixed-rate deals are gauged on.

Over the last month the two-year swap rates have declined almost 1 percent from 5.61 percent to today (September 23) to 4.63 percent.

RBS reduction would mean a five-year fixed-rate deal for someone who has 25 percent of the property value will cost them 5.74 percent, however, if you only have 5 percent of the property value to put down as a deposit then you will be paying 6.64 percent. Royal Bank of Scotland has said they will also be taking 50 percent off certain arrangement fees.

Source: Guardian