Mortgage rates cut by lender

July 31, 2008 By

Last week the Nationwide provided some long awaited good news for consumers in the UK, after announcing that it was cutting some of its mortgage interest rates. The cost of mortgage borrowing has remained high despite three base rate cuts since December of last year and despite a drop in swap rates according to a recent report. This has made it even more difficult for consumers to get a suitable mortgage product at a time when availability is already restricted and affordability is already low.

The Nationwide announced that it was cutting the mortgage interest rates on both its tracker and its fixed rate deals by up to 0.46%. However, there is a catch – customers that want to benefit from the lower rates will have to stump up a hefty 25% deposit to qualify. Rates have also fallen for those with smaller deposits but still remain high, with most in excess of 6.5%. Officials state that a number of other lenders have also been reducing interest rates over recent weeks on some mortgage products, but often the better rates are only available to those that have a sizeable deposit to put down.

One mortgage broker stated: ‘For far too long, the status quo of the mortgage loans market has been increasing rates and misery for most borrowers. The crunch has seen liquidity in the market all but dry up, but news from Nationwide that they are cutting both tracker and fixed rates will come as a huge relief for all borrowers. With one of the country’s leading lenders taking this welcome step, this should be a sign of things to come.’

An official from Nationwide stated: ‘For the second time this month, we are in a position to reduce the rates on mortgages, offering some of the most competitive rates in the market. As part of our commitment to rewarding customer loyalty we now have a Lifetime tracker mortgage offering a good deal for customers who are switching their Nationwide mortgage.’

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