UK Lenders Announce Mortgage Rate Cuts

The latest announcement by Lloyds Banking Group is good news for borrowers waiting for a further decrease in mortgage interest rates.
Lender’s mortgage arm, Cheltenham & Gloucester, reported a 0.5% cut in mortgage interest rates on 2-year fixed and tracker mortgage deals that are offered through mortgage brokers.
Moreover, Cheltenham & Gloucester launched a new best buy mortgage deal. Lender’s borrowers with deposits of 40% or more are now offered to benefit from a 2-year tracker deal available at 2.29% above the base rate (a pay rate of 2.79%) and a fee of £995.
Other cuts in Lloyds Banking Group mortgage deals, which signify slow recovery of the UK mortgage market coupled with easing of lending criteria, were also announced. They include a cut in the interest rate on a 2-year tracker mortgage deal for borrowers with 10% deposits, which is now offered at 5.99%, and a cut in the interest rate on a 2-year fix, which is now available for borrowers looking for 90% LTV at 6.99%.
Cheltenham & Gloucester, however, was not the only lender that surprised borrowers with cuts in mortgage rates. Abbey, another leading UK mortgage lender, recently introduced a new 2-year fix for borrowers with 30% deposits. The deal is available at 3.69% and a fee of £799, and is the market-leading offer for borrowers with 30% deposits.
Other British mortgage lenders also announced mortgage interest rate cuts earlier this month. They include Northern Rock and Nationwide.
However, average UK interest rates are still higher than they were in the beginning of 2009, with an average 2-year fixed mortgage deal offered at 5.02%, which is 0.41% more than in May 2009.
Mortgage brokers are determined, though, that the market is moving in the right direction as mortgage rates are definitely set to increase as the market recovers.