Lloyds TSB group, which also lends under the Cheltenham & Gloucester brand, is reducing its mainstream fixed rate mortgages by up to 0.31%, while tracker deals are being cut by 0.1%.
It’s fixed rate loans for people borrowing between £50,000 and £250,000 has also been reduced by 0.5%, to give a new rate of 5.49%, although this deal will only be available to borrowers with a 25% deposit.
Lloyds TSB announcement of across the book rate reductions along with similar moves by other lenders including the Halifax is a further sign that competition is slowly returning to the mortgage market as lenders once again compete for business.
Jonathan Smith, Chief Broker at the online mortgage brokers in Manchester 'North Mortgages', said: "This is good news for borrowers as the mortgage market improves.
Rates are coming down for fixed and trackers deals across the board as competition continues to increase. It's been a long time coming and let’s hope this trend continues with the increased competition between banks and building societies."
He said the reduction in swap rates is the key driver behind lenders cutting their fixed rate mortgages, after they had fallen from a peak of 6.5% to 5.4% with some also reducing the cost of their tracker deals.
It is worth noting that most of these reductions are aimed at borrowers with larger deposits, but as swap rates fall and competition increase he would expect improved deals to emerge for people with high LTV's.
Source - Jonathan Smith, Mortgage Broker www.northmortgages.co.uk
