Competition returns to mortgage market as Woolwich, Clydesdale and Yorkshire cut rates

07 May 2009 / by Rachael Stiles
After mortgage lenders Woolwich, Clydesdale and Yorkshire Bank cut their interest rates this week, moneysupermarket.com is telling potential borrowers to take comfort from the fact that competition is returning to the mortgage market.

"Two Swallows do not make a summer", said Louise Cuming, head of mortgages at moneysupermarket.com, commenting on the signs of competition in the mortgage market, "but it is very encouraging to see lenders reducing the cost of borrowing and making those deals available at higher loan to values."

While a number of mortgage lenders have announced rate cuts recently, they have largely been for small LTV (loan to value) mortgages, "which is of little help to many existing borrowers," Ms Cuming said.

But, she added, "It is great to see Woolwich and National Australia Bank (via its Clydesdale and Yorkshire Bank brands) making better deals available at higher LTVs."

The new rates on the Woolwich mortgage range, now nearing the top of moneysupermarket's best buy tables, is part of its parent bank Barclays' pledge to increase lending to homeowners by £5.5billion.

Ms Cuming said of Woolwich that "despite not offering the most competitive products in every case, as a range it is moving in the right direction, and this constructive initiative should to be applauded."

The fact that Woolwich has increased the LTV available on its more competitive mortgages is "encouraging" she said, "meaning that affordability will now have more reckoning on borrowers obtaining the mortgage they want."

She added that "Clydesdale and Yorkshire Bank are to be congratulated for making it easier for borrowers to access mortgage deals. These providers are the only national players currently offering mortgages up to 95 per cent, and to then also waive arrangement fees across a range of products shows a real commitment to kick starting the mortgage market."

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