UK lenders finally start mortgage rate cull

Nine of the UK’s 12 biggest mortgage lenders have cut interest rates in the last two weeks, suggesting the tightening on lending may be finally easing.

A moneysupermarket.com survey showed two or three-year fixed rates have been slashed virtually across the board.

Halifax has reduced rates by 0.95 per cent on two-year fixed deals, while Bradford and Bingley has hacked 0.60 per cent off a similar product.

Alliance and Leicester has dropped its three-year fixed rate deal by 0.35 per cent and Bradford and Bingley has also reduced this product by 0.60 per cent.

Moneysupermarket.com head of mortgages Louise Cuming said:

“We are in the midst of a mortgage crisis, yet three quarters of the nation’s biggest lenders have recently slashed rates on deals.

“For such a significant proportion of mortgage providers to drop their rates underlines an industry-wide recognition that rates were too high.”

She said borrowers could “take heart” in what was positive news which indicated banks were making an effort to cut loan costs.

But she also said most of the cuts were limited as they generally only applied to customers with good credit ratings and sizeable deposits of around 25 per cent.

The website compiled the figures on the country’s biggest lenders last week and labelled the cut trend as a “rate war”.

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