Northern Rock leads the way in lowering mortgage rates

13 August 2008

Other lenders follow suit after Monday’s reductions by Rock

Yesterday saw more proof that cheaper deals are emerging on the mortgage market following the reductions made by Northern Rock on Monday.

Woolwich, the mortgage arm of UK bank Barclays, reduced the interest rate on its two-year fixed-rate mortgages, which are popular with first-time buyers, to below 6%.

Meanwhile, a division of Yorkshire Building Society also announced that it had launched a new range of mortgages which can only be applied for through mortgage brokers.

Northern Rock is currently offering a two-year fixed-rate mortgage product with an interest rate of 5.89% for borrowers with at least a 25% deposit.

This is a very competitive deal considering Bank of England figures showed the average interest rate attached to this type of mortgage product was 6.36% in June.

The new Woolwich mortgage deal is offered at a rate of 5.99% but, unlike Northern Rock’s new deal, is only available to borrowers with at least a 60% deposit.

David Finlay, mortgage intermediary business director at Woolwich, said: “These reductions will provide some relief for customers coming off fixed rate.

“We’re seeing strong competition in the market and some easing in fixed rates – and that adds up to a good result for customers,” he added.

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