A number of mortgage lenders have reduced mortgage rates in response to the 0.25 per cent interest rate cut introduced by the Bank of England on December 6. The latest of these include Abbey Mortgages, Yorkshire Building Society and Standard Life Bank.
From December 20, Abbey Mortgages will cut interest rates by up to 0.1 per cent on several of its fixed-rate deals. The new rate on its two and three year fixed-rate mortgages with homebuyer solution has been cut to 5.89 per cent, while the rate on its five year fixed-rate deals with remortgage solution has dropped to 5.79 per cent.
Its ten year fixed-rate mortgages – core product, homebuyer and remortgage solution – will fall to 5.64 per cent, 5.94 per cent and 5.74 per cent, respectively. Meanwhile, the lender's 15 year fixed-rate deal – core product – will now be set at 5.64 per cent.
Nici Audhlam Gardiner, head of mortgages at Abbey said: "Our range also has a number of other attractive products, including our recently launched Fix and Flex product which allows people to fix for the first six or 12 months then revert to a flexible mortgage at just 0.49 per cent above base for the life of the deal." However, the company is increasing rates on its tracker products by 0.1 per cent.
Standard Life Bank has also confirmed it will cut its Freestyle standard variable rate by 0.25 per cent. The new rate will be 7.21 per cent with effect from January 1.
Meanwhile, Yorkshire Building Society has actually introduced a new range of lower priced fixed-rate mortgages, offering a more substantial cut for customers with larger deposits.
The new products include a 5.49 per cent fixed rate, which is available for two, three, five and ten years with an arrangement fee £999 for mortgages of up to 75 per cent of the property value. A 5.69 per cent fixed rate is available for two, three, five or ten years with an arrangement fee £999 for up to 95 per cent of the property value and a 6.39 per cent fixed rate is available for two, three or five years with no arrangement fee.
Yorkshire Building Society spokesperson Tanya Jackson said: "The majority of our customers do have a deposit of more than 25 per cent of the property they are mortgaging against, so we expect this change to appeal to many applicants.
"Traditionally two year fixed-rate deals have been cheaper than longer-term deals, which has attracted borrowers to them. It will be interesting to see the term borrowers choose when price isn’t a deciding factor," she added.
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, Standard Life mortgages
and Yorkshire Building Society mortgages
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