Nationwide, one of the UK’s largest mortgage lending institutions, has reduced the rate of all its two year fixed rate mortgages and some of its three year fixes.
From this week, buyers will be able to get a 70% LTV three year fixed rate contractor mortgage at 2.89%. The deal attracts a £900 product fee but the fee on some products is discounted by £500 for first time buyers.
The latest reductions come hot on the heels of Nationwide’s decision to reduce the interest rate on its five year fixed rate mortgages.
A lot of lenders are slashing rates as the competition battle hots up. Low rates and falling house prices could encourage people with enough money to put down a large deposit that now is a good time to buy.
In fact the housing market does seem to be picking up if the latest figures from the CML are to be believed. In June, 18,100 first time buyers were granted a mortgage, 24% more than in May. A total of 46,700 residential mortgages were approved in June, worth £6.7 billion.
The average deposit paid by first time buyers in June was 20%, unchanged since February. 63% of borrowers in the second quarter of this year have opted for a fixed rate mortgage, up 3 percentage points on Q1. Interest only mortgages appear to have lost a lot of their appeal, with 87% of home loans being on a repayment basis in June.
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