You are here: Home - Mortgages - First Time Buyer - News -

Biggest lenders cut borrowing costs ‘despite ever-tightening margins’

0
Written by:
09/03/2020
The UK’s 10 biggest lenders have dropped the cost of mortgages further since the start of the year, despite pressure on margins, according to analysis.

Many of the largest banks and building societies have reduced the overall cost of two and five-year fixes at 75 per cent loan to value (LTV) since January, rate monitoring firm Moneyfacts found.

Headline rates have not changed significantly, but lenders have instead focused on changes to product fees to become more competitive in the market.

For example, the true cost, including fees, of Barclays two year fixed-rate at 75 per cent LTV has fallen from 2.08 per cent in January to 1.96 per cent since January.

The true rate takes into account the overall cost of products as well as the interest rate.

At the same time the true cost of Coventry Building Society’s five-year fixed rate at 75 per cent has dropped to 1.78 per cent from 1.92 per cent.

Moneyfacts spokeswoman Eleanor Williams said: “As our data shows, the majority of the top 10 mortgage lenders have made reductions to the true rates on their two and five-year fixed rate deals at 75 per cent LTV in this early part of 2020.

“With consumers becoming increasingly savvy, many are aware that interest rates are at historic lows for mortgages, and so the next logical step for them is to consider the overall package of a deal.”

She continued: “It is encouraging to see reductions from so many providers, whether these shifts are being applied to the interest rates themselves or to the overall package offered.

“Considering that UK Finance figures show that gross mortgage lending declined by 0.4 per cent in 2019, it demonstrates how keen lenders are to compete for business despite ever-tightening margins, and it also implies they are keeping in mind that borrowers are now enticed by more than just a low interest rate.”

 

 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

Your rights for refunds if travel is affected by strikes

There have been a wave of strikes this year across many different industries, and more are planned over Christ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week