Monday, August 13, 2012

UK lenders in mortgage war

Competition among UK lenders to offer the most affordable mortgage rate is heating up, thanks to lower borrowing costs and the government’s Funding for Lending Scheme.

Following the launch of the new scheme in July, lenders have reduced rates across 205 deals, including 166 fixed-rate loans and 39 variable mortgages.

HSBC was the first to offer a five-year fixed-rate loan at 2.99 percent in mid-July. This was matched immediately by Santander. However, both deals come with a fee of under £1,500 (S$2,919) and strict lending criteria.

Natwest then offered a five-year fixed-rate loan at 2.95 percent, but with a higher fee of £2,495 (S$4,855). At the same time, Tesco unveiled a 3.99 percent two-year fixed-rate loan that comes with an £800 (S$1,556) fee.

Joining in, Nationwide, First Direct, Leeds Building Society and Barclays slashed rates on their fixed and tracker loans by up to 0.5 percentage points.

Mark Harris, Chief Executive of mortgage broker SPF Private Clients, said: “The mortgage rate war has started and looks set to rage on for the next few months.”

View the original article here

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