30th September 2014
Mortgage lenders are jostling to keep on top of the best-buy tables as West Brom building society and Tesco Bank launch market-leading new deals.
Tesco Bank has launched a five-year fixed rate at 2.99% with a £1,495 fee for borrowers with a 25 per cent deposit.
West Brom is offering a slightly higher rate of 3.18% for a five-year fixed, also with a 25 per cent deposit, but the deal comes with a lower fee of £599.
Skipton Building Society also revealed it will be cutting three and five-year fixed rates by up to 0.38% tomorrow.
Mortgage rates had moved upwards earlier this year due to a combination of new regulations under the Mortgage Market Review, which resulted in lenders limiting their business to cope with systems changes, and also the end of the Funding for Lending Scheme, which had provided cheap finance to home loan providers.
But rates have started to fall again over the past month and the latest competitive deals follow price cuts by Barclays, HSBC, Halifax, Lloyds Bank and Nationwide Building Society and Virgin Money.
Aaron Strutt of Trinity Financial, the mortgage broker, said: “Many of the banks and building societies have been fighting it out to top the best buy tables and there are some really great deals around at the moment. Some two-year fixes are available below 2% and a selection of five-year fixes are sub-3%.
“It is good news for borrowers that there is so much competition in the market and the lenders are trying so hard to hit their lending targets, particularly as it is driving rates down.”
Reacting to news earlier today that house prices fell by 0.2 per cent in September, Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said that despite this and the recent rate cuts by lenders affordability is still a key concern for many first-time buyers.
He said: “Even if house price growth does start to slow, it is vital that there is still plenty of financial support available for those who need it.
“The continuation of government schemes such as Help to Buy and wider availabilityof 95% mortgage lending remains crucial in helping those who can only afford a small deposit onto the housing ladder,” he added. “The construction industry must also ramp up production of new homes to ensure the dangerous imbalance between supply and demand is corrected.”