Fixed Rates Are Falling
Halifax led the way, and several other big-name lenders are following suit with cuts to their fixed rate mortgages. They can do this because the swap rate has come down over the last month. However, the best deals are still available to those with plenty of equity in their property or a large deposit.
Halifax is no longer the biggest mortgage lender in the UK. That honour now goes to the Abbey. However, Halifax has certainly led the way recently with regard to mortgage rates.
The mortgage giant made cuts to its fixed-term loan rates in the week before last, and a number of lenders took Halifax’s lead and followed suit.
Among those cutting their rates were Abbey, Britannia, Cheltenham & Gloucester and Leeds, Nationwide and Yorkshire building societies. This is good news for borrowers as these are among the biggest and best known High Street lenders.
Biggest mortgage lender Abbey cut its two and three year fixed rates by up to 0.25%, making its best two-year fixed rate now 5.89%, with a fee of £995. Cheltenham & Gloucester took up to 0.31% off its fixed rates with its best deals now starting at 5.65%. C&G – part of the Lloyds TSB group – also took 0.1% of its tracker deals, taking the starting point for the lowest down to 5.69%.
The key factor in fixed rates for mortgage lenders is the swap rate, which is the rate at which banks lend to each other. This has fallen by around half a percentage point in the last month, which has given the banks and building societies some room for manoeuvre. Borrowers will be watching the changing rates with some relief.
Nevertheless, the best deals are only available to those with plenty of equity in their property or to buyers with a 25% deposit. For those with less, the rates are higher, and are not falling as readily.
One mortgage deal from Britannia is available only to those with 50% equity in their property. It is a two-year fixed rate at 5.99%.
However, falling fixed rates are a good sign, and with the Bank of England base rate possibly coming down in the autumn, it may be that variable rates will also start to come down.
