NatWest has fuelled a home loan price war with the launch of a market-leading fixed rate deal at 3.89 percent.
It is the latest of the high street lenders to offer deals at under 4 percent against the background of the Bank of England’s decision to cut the base rate by a quarter point to 5 percent.
At the same time, so-called swap rates, which set the interest rates finance giants lend to one another, have also been edging down.
To date, most of the market leading mortgage deals are only available to those with a big deposit of around 40 percent. However, there are hopes that better deals will soon be available to first time buyers with less to put down.
NatWest is reducing the rate on a five-year fix based on a 60 percent loan to value to 3.89 percent. It comes with a hefty fee of £1,495.
There is also a two-year fix at 4.05 percent but there is a punishing fee of £3,499.
Santander has also launched a range of mortgage reductions which take effect from today.
Mortgage brokers welcomed the reductions and predicted more will follow in the coming days.
Tony Castle, Managing Director at…
