Lower Rates for Mortgage Customers

Mortgage rates have been falling quite sharply with at least half a dozen lenders unveiling rate cuts and fee reductions in the last two months.

Halifax, Nationwide, Virgin, Woolwich and Skipton have all cut rates, while others including Santander and HSBC have done away with some of their fees.

Lenders are also throwing in extra freebies including free valuations and legal costs.

A spokesperson for mortgage broker London & Country put the rate cuts down to a combination of factors. The first is that ‘swap rates’ – borrowing costs banks factor in their fixed-rate mortgage pricing – have been falling.

Mortgage lenders are keen to stay competitive and attract new customers so they are passing on the reduction in costs with cheaper home loan deals.

The second reason is that lenders have now had almost six months to get to grips with new tougher lending criteria after the introduction of the Mortgage Market Review back in March and are now getting back to business as usual.

The final factor is that we’re getting in to the autumn, one of the busiest times in the property market so lenders are cutting their rates to woo new customers and meet the year end targets which run to the end of December.

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