Mortgages Uncovered

We have been starting to see the early stages of a price war in the UK as Britain’s struggling mortgage market are starting to introduce new competitive mortgage deals recently.

NatWest and RBS shrugged off their collapsed share prices last week following the launch of a new range of fixed rate and tracker products, some of which represent some of the cheapest deals ever produced.

Abbey and Alliance and Leicester reduced many number of their tracker and fixed rate mortgages. However, earlier in the month, Halifax and HSBC started offering 2 year fixed rate mortgage deals of below 3% for any customers who are currently banking with them – these deals are still only available any borrower asking for 60% or below of their property’s value. Regardless of this, the recent round of interest rate cuts appears to be opening up the market for homebuyers who require up to 75% of their property’s value.

“Lenders have been introducing cheaper fixed-rate mortgages in recent days on the back of a significant drop in the cost of funding in the wholesale markets,” said Melanie Bien, a director of the independent mortgage broker Savills Private Finance.”Fixed rates are now extremely attractive but you still need a 25 or 40 per cent deposit or equity to qualify for the cheapest deals. There is little choice for those with a 10 per cent deposit. Fixed rates will continue to look cheap in coming weeks but it is unlikely they will fall much further. Lenders are concentrating on margin rather than market share and being fussy about whom they lend to.”

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