Rival mortgage lenders slash rates
Woolwich, the mortgage brand of Barclays, is cutting its lifetime tracker deals by up to 0.2 percentage points today.
The lender is offering a deal pegged at 2.13 points above the Bank of England base rate, a current pay rate of 2.63 per cent. The deal has a £999 fee and is available up to 70 per cent of a property's value.
There was also good news for borrowers with smaller deposits as Halifax, the UK's biggest mortgage lender owned by the Lloyds Banking Group, cut the cost of new deals available up to 85 per cent of a property's value. Earlier this week it lowered tracker rates by up to 0.2 percentage points, offering a deal at 4.29 points above base, a pay rate of 4.79 per cent, with a £1,499 fee.
Halifax has also eased lending criteria on its tracker home loans, raising the maximum loan-to-value ratio on its most competitive deals from 60 to 70 per cent of a property's value.
The cheaper tracker deals follow a series of cuts last week to fixed-rate deals, with Santander, along with Yorkshire and Coventry building societies, all reducing the cost of two, three and five-year deals. Santander is expected to cut interest rates again on Friday.
Melanie Bien, director of Savills Private Finance, the broker, said: "Competition among lenders is hotting up, particularly among deals for borrowers who need to borrow up to 75 per cent of a property's value, with the biggest lenders cutting rates and easing criteria.
"It appears that the big players in the mortgage market have developed more of an appetite for lending and are more prepared to look at cases and take a view. Dare I say, lenders also appear to be slightly more flexible for the right sort of client.
"However, more still needs to be done for those wanting to borrow up to 90 per cent of a property's value. There has been some movement here but not enough, making life difficult for first-time buyers."
There are currently more than 2,500 deals available to borrowers, the highest level since May last year, according to moneysupermarket.com, the comparison website. It said that the number of mortgages available from lenders had climbed for the third consecutive month, but was still well below the 30,000 deals available when the market peaked in 2007.
Brokers have also attributed the revival in the mortgage market and recent drop in mortgage costs to the stabilisation of house prices, boosting confidence among lenders.
Separate figures released yesterday indicated that around 100,000 landlords plan to expand their property portfolio this year. Paragon, the buy-to-let lender, found that one in ten property owners were hoping to pick up a new buy-to-let property, with the priority being terraced homes that had held their value. However, the survey also revealed that two-thirds of landlords had reported that it had become more difficult to secure a mortgage deal.
There are currently only two major lenders operating in the buy-to-let market - The Mortgage Works, part of Nationwide Building Society and Lloyds Banking Group, which owns BM Solutions and Cheltenham & Gloucester.