Eight lenders lower fixed mortgage rates

15 March 2007
Lower-price fixed-rate mortgages are returning to the market as the dust settles on the interest rate rise in January, Moneyfacts.co.uk has revealed.

In the aftermath of the hike, homeowners rushed to grab the last of the lower-rate fixed-rate products before lenders passed the rate rise on to borrowers.

But eight lenders have now made their fixed-rate deals more competitive, remarks Denise Blake, Moneyfacts' mortgage analyst.

The most substantial rate cuts come courtesy of Britannia, whose five-year fixed rates have been lowered by 0.4 per cent and Direct Line, with selected rates cut by 0.3 per cent.

Other lenders cutting rates include Alliance & Leicester, which has slashed the cost of its two-year fixed-rate offering, and Bank of Scotland on a range of rates.

These cuts seem to contradict the judgement Ray Boulger, technical director at John Charcol, passed when speaking to the Guardian this week: "If your reason to sign up for a fixed-rate deal now is to get out of paying more if interest rates rise, you are too late."

But "with another rate rise still a distinct possibility, it will be interesting to see how long this latest downward trend actually lasts", Denise Blake warned.

To learn more about fixed-rate mortgages, click here.

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