One of Britain's largest mortgage lenders have cut their interest prices again helping out 1st time buyers. Abbey claim to be the largest new mortgage lender holding a 26% stake for new mortgages in the UK for the first 6 months of this year.
Many other lenders are following suit with the Halifax dropping their two year fixed rates by up to 0.38% and also cutting 30 other mortgage deals. The Bank of Scotland have cut 36 mortgage deals by up to 0.7% also, in a bid to claim a stake of the market.
A Halifax spokesman said that "It's down to competitor activity; we are aiming for a one-in-five market share".
This is encouraging news for new lenders in light of the credit crunch with the main providers battling it out to gain a share of the market which will only result in rates lowering. This is a positive step to regaining security in the financial market once again.
Expert Ray Boulger of the mortgage brokers John Charcol said that "Two-year swap rates [cost of lending between banks] are now 1% down from their peak in the middle of June,"
"So there are increased signs of competition in the market and the big lenders are starting to slug it out a bit," he added.
Even with rates falling and the prices of houses set to drop by 20% by next year you will be in a better position if you have savings. New lenders with 25% of their deposit will receive a lower rate than those who can't stump up the deposit.
The number of new Mortgages taken out will increase if the rates are to go down, with the number of offset mortgages and remortgages also set to increase slightly due to the fact more people will be wanting to take advantage of the lower mortgage rates.
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