Reduced Home Mortgage Rates: Competition Returns

The past few weeks have seen, several lenders, including Abbey ( LON:ANL_P), Halifax (AMEX:HX), Leeds Building Society ( LON:LBS) , Northern Rock (PINK:NHRKF) and Woolwich (LON:BARC) have recently moved to reduce mortgage rates, suggesting a loosening in the market and a welcome sign that competition is returning.

There have been new and competitive products that have entered the market, with the lenders offering higher loan-to-value (LTV) ratios. However in reality people looking to buy their first homes or remortgage on to a new deals will still find conditions difficult.

Melanie Bien a director of mortgage broker Savills Private Finance said “The nearest we have come to a price war in a long time has broken out in the mortgage market. Aggressive pricing from Northern Rock has driven the market over the past month and currently offers some of the best rates.

The price of not having such a deposit can be high. According to financial information service Moneyfacts, the average fixed-rate mortgage with a 75 per cent LTV is 4.5 per cent, while fixed rates with a 90 per cent LTV average 6.2 per cent. To read more on this story go to independent.co.uk.