Abbey’s 5-year fixed rate has reduced from 5.44% to 5.25% on loans up to 75% loan to value, while the 2-year fixed rate with Homebuyer Solution has reduced to 3.19% on LTVs up to 70% with a £995 fee.
Northern Rock’s everyday rates on 2-year fixed rates on loans up to 80% LTV are down to 4.35% from 4.59% and on loans up to 85% LTV, rates are now 4.89% down from 5.29%.
Ray Boulger, senior technical director at John Charcol, said: “As far as 5-year fixes go Abbey has made it a bit less uncompetitive, but it’s still not that competitive a rate when you look across the market.
“The best value is from Accord at 4.19% on loan to values up to 70%, though it has quite big fee at £1995 and wouldn’t be suitable for smaller mortgages. Yorkshire has a slightly cheaper deal at 4.15%, but that’s available direct only.
”All lenders are setting their rates on basis of how much business they want to do.
“It’s no longer enough to assume that money market rates will indicate what lenders will do with their own rates. 5-year swap rates are extremely low at 2.74% but that’s not being reflected in lenders’ decisions.
”Some lenders will put their rates up in order to limit business and maximise their profit margin.
“Overall I don’t think we’ll see tracker margins come down any more and I think if you want a tracker, there’s no longer any point in hanging around.
“In fact we might see more lenders increase their tracker rates as Abbey has done.
”On the other hand, if you’re wanting a fixed rate, there’s probably not a huge rush at the moment, fixed rates are continuing to come down.”
