Another lender cuts mortgage rates

Published:
27 August 2008
Topic:
News,Money,Mortgages

The Alliance & Leicester (A&L) has announced it is to lower its mortgage rates as competition returns to the beleaguered market.

The group is reducing rates by between 0.1% and 0.55% on all but one of its mortgage products.

It follows the recent trend among lenders to pass on reductions in wholesale funding costs to consumers as they once again compete for borrowers.

A&L's biggest reductions were on fixed-rate mortgages, with the group reducing its two-year fixed-rate mortgage to 6.69% from 7.24%, for people borrowing 85% of their home's value and paying a £599 fee.

But it is also cutting the cost of its two-year tracker deal by 0.1% to 6.39% for people with a 15% deposit, while the arrangement fee on the loan has been halved from 2% of the sum borrowed to 1%.

A&L spokeswoman Debbie Hughes said: "A number of lenders, including ourselves, are currently able to take advantage of lower money market rates. Lower swap rates have enabled us to reduce the rates on our fixed products."

But like other lenders, A&L continues to demand high deposits from its borrowers.

The group will not advance a mortgage to anyone with a deposit of less than 15% of the value of their home, while borrowers need to put down 25% in order to qualify for the group's best rates.

Copyright © PA Business 2008

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