Fifteen lenders cut deals in a week as mortgage wars continue
New research from a leading analyst has found that 15 mortgage lenders cut their mortgage products in mid April as the low-cost 'mortgage war' continues. Moneyfacts has revealed that over a dozen lenders have reduced the cost of borrowing in an attempt to drive new business, allowing home buyers to benefit from lower costs.
The research comes as a major lender launches yet another record-breaking fixed-rate deal.
15 lenders cut the cost of borrowing
Over a dozen of the UK's lenders cut their mortgage rates in just one week in mid-April in an attempt to encourage millions of the UK's variable rate borrowers onto a fixed deal.
Charlotte Nelson, of financial information service Moneyfacts, said that 15 lenders had cut mortgage rates in just seven days. “The competition to be the lowest in the mortgage market shows no signs of stopping and is great news for borrowers,” she said.
While the fall in rates is good news for buyers looking for a cheap mortgage deal, experts have urged consumers to consider the whole cost of a package in order to work out which deal is best.
Keith Osborne, editor of Whathouse.com, said: “Some of the very best deals come with high fees and significant deposit requirements. It is vital that you find a deal for which you qualify but also with fees that don't outweigh any interest savings that you make.”
The BBC reports that competition among mortgage lenders has resulted in a greater willingness to lend to those without huge savings.
Mortgage expert Aaron Strutt told the BBC: “The lenders are stepping up the fight to attract new borrowers and rates are still getting cheaper. First-time buyers with a 5% deposit can take a fixed rate just over 4% and if they can raise a 10% deposit the rates are as low as 2.69%.
“A few years ago borrowers needed a 40% deposit to access a really good mortgage, but now rates are cheap for most new buyers. HSBC's latest fixed rate really takes the mortgage price war into new territory and even cheaper deals may well filter through to the market.”
Bank launches the first ever sub-2% five-year fixed rate
One of the UK's major lenders has become the latest to offer a record-breaking fixed-rate mortgage deal. HSBC has unveiled a five year fixed rate mortgage at 1.99%; the first five year fixed rate below 2%. It is available to a maximum 60% loan to value and there is a £1,499 fee.
Brokers welcomed the record-breaking deal but urged borrowers to seek advice before taking the product. Mortgage expert Andrew Montlake told The Guardian: “The headline rate is extraordinary, but there will be a lot of people who won’t get this as HSBC is not the easiest lender to get through.”
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