Lloyds TSB cuts mortgage rates
Lloyds TSB has announced it is cutting its mortgage rates for the second time in two weeks amid further signs that competition is returning to the mortgage market.
The group, which also lends under the Cheltenham & Gloucester brand, is reducing its mainstream fixed rate mortgages by up to 0.31%, while tracker deals are being cut by 0.1%.
It is also slashing its two-year fixed rate loan for people borrowing between ?50,000 and ?250,000 by 0.5%, to give a new rate of 5.49%, although borrowers will need a 25% deposit to qualify for the deal.
At the same time internet and telephone bank first direct said it was introducing a fee-free offset tracker mortgage with a rate of 5.99% for people with a 20% deposit – putting it at the top of the best buy tables.
The moves are a further sign that competition was returning to the mortgage market as lenders once again compete for business.
The announcements come just days after Halifax said it was cutting some of its fixed rate and tracker mortgages by up to 0.45%, although its reductions only apply to people who have at least a 25% deposit.
Ray Boulger, senior technical manager at Charcol, said: “Clearly things are improving, rates are coming down and competition is increasing. There does seem to be genuine competition among the top six banks and a number of building societies.”
He said two-year swap rates, upon which fixed rate deals are based, had fallen from a recent peak of 6.5% to 5.4%, with longer-term swap rates falling by nearly as much.
He said this had been the key driver behind lenders cutting their fixed rate mortgages, with some also reducing the cost of their tracker deals.
But he added that the increased competition was really only for people with larger deposits. He said three of the top five lenders now only offered their best rates to borrowers with at least a 40% deposit.
Related posts:
- Banks cut mortgage rates further
- Fix your mortgage now
- Mortgage firms feel pinch as funds dry up
- Abbey raises some mortgage rates
- Figures show drop in mortgage costs
Tags: Mortgage Rates