More lenders cut mortgage rates

Three more lenders - Nationwide, the Co-op Bank and Yorkshire Building Society - have cut the cost of home loans after a fall in wholesale funding costs.

Nationwide`s five-year fixed-rate is down by 0.3% and the two-year fixed-rate by 0.1%, with arrangement fees for both up from £1,499 to £1,999. Two-year remortgage trackers are being cut by 0.05%, and a new range of two-year fixed-rates with a £999 arrangement fee starts at 5.58% with a 40% deposit.

Yorkshire has cut its Fresh Start mortgage by 0.5% and its two, three and five-year fixed-rate loans by 0.15% to 5.59% with a 25% deposit. Arrangement fees on mainstream products fall to £495 from £995.

The Co-operative is cutting its three and five-year fixed-rate mortgages by 0.3% and 0.7% with a 25% deposit from September 15.

Bank of England figures show the average cost of two and five-year fixed-rate mortgages with a 25% deposit is down 0.27%. A five-year fixed-rate for a 95% loan fell by just 0.05% to an average 7.09%.

Ten of the UK's 12 biggest lenders have cut their two or three-year fixed-rate deals at least once during the past two weeks, as lenders once again fight for business.

Copyright © PA Business 2008

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