A battle amongst mortgage lenders to win new clients is forcing down borrowing rates and propping up property costs as extra banks come to the market with offers lower than 1 per cent.
High street stalwart Nationwide has become the most recent lender to chop its charges after launching its lowest-ever mortgage deal for brand new clients yesterday.
Britain’s greatest building society mentioned it might provide new borrowers who had a deposit of 40 per cent a fee of 0.87 per cent.
The transfer comes after the UK housing market recorded a shocking bounceback in August, with the typical property value rising by almost £5,000 to £248,857 within the space of 1 month.
Mark Harris, chief executive of mortgage broker SPF Private Clients, mentioned: “Property prices are rising due to lack of stock, while cheap borrowing rates give borrowers confidence to go after the property of their dreams in the race for space.”
Alongside Nationwide’s interest rate drop, Barclays additionally reduced the price of some of its borrowing rates, together with lowering the rate on a two-year tracker mortgage to 0.85 per cent. As with the Nationwide deal, borrowers will need a 40 per cent deposit.
Henry Jordan, Nationwide’s director of mortgages, mentioned: “As one of the largest lenders in the UK we always keep our rates under review to ensure we can maintain our competitive position in the market.”
Platform, the lending arm of the Co-operative Bank, has reduced the rate on its 40 per cent deposit product to 0.95 per cent.
Lewis Shaw, founder of Shaw Financial Services, mentioned: “The mortgage rate wars have taken on an almost Spartan intensity as lenders fight for the market share of low-risk, quality borrowers.
“Mortgage lenders are elbowing and barging one another in an effort to comb up the highest high quality customers they can and they’re utilizing absurdly low rates to land their prey.”
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