Since the monetary policy committee's decision to cut the base rate from 5.5 per cent to 5.25 per cent at the beginning of the month, many lenders have slashed fixed-rate mortgage
rates. As a result, Abbey is now advising customers to take advantage of lower rates while they last.
The lender has lowered the rate on its two-year fixed rate mortgage deal by 0.2 per cent to just 5.39 per cent with a £1,499 fee. “In the current market, certainty seems to be what a lot of people want, so we’re driving down the costs on our fixed rate deals," says head of Abbey Mortgages, Nici Audhlam-Gardiner.
Changes to its remortgage deals have also been introduced. Its three-year fixed rate remortgage deal is currently being offered at 5.62 per cent, the same rate as the core product, so that customers receive legal and valuation services for free.
According to Abbey, longer-term fixed deals – recently endorsed by Chancellor Alistair Darling – also appear strong. Its five-year mortgages have stayed at the reduced rate, 5.63 per cent with a £499 fee, introduced earlier this year. Meanwhile, its 10 and 15 year fixes start from 5.59 per cent.
However, in line with several other mortgage lenders, the group's tracker mortgages have risen in price by between 0.20 and 0.25 per cent. Its best tracker deal as of February 22 will be 5.74 per cent with a £999 fee. The company will also end the pilot of its 100 Plus mortgage product on February 22 in order to evaluate the results of the scheme.
A recent survey
from fairinvestment.co.uk found that more than half – 57 per cent of people in the UK – would choose either a short- or long-term fixed-rate deal if they were to take out a new mortgage. With continued instability in the financial markets, it appears that fixed deals are increasing in popularity, particularly following the two rate cuts implemented in the last three months.
© Fair Investment Company Ltd