Northern Rock cuts mortgage rates
Updated on 16 October 2009
Northern Rock has become the latest lender to announce it was cutting its mortgage rates as competition slowly returns to the market.
The nationalised bank said it was slashing up to 0.4% off the cost of its fixed-rate mortgages, while it was shaving its tracker rates by up to 0.14%.
It is the second time in two weeks that the group has reduced the cost of its mortgage products.
The changes come the day after Nationwide announced it was cutting rates on 34 of its mortgage deals for homebuyers by up to 0.84%.
The reductions made by Northern Rock leave its two-year fixed-rate mortgage for someone with a 30% deposit who pays a £595 fee at 3.69%, while tracker deals for the same borrower start from 2.69%, or 2.19% above base rate.
Lloyd Cochrane, head of mortgage products, said: "These rate reductions provide further evidence of our commitment to the mortgage market.
"These products offer some of the lowest rates available for homebuyers and re-mortgage customers alike."
Darren Cook, spokesman for moneyfacts.co.uk, said: "This is good news. We are seeing a growing number of reductions. We hope it will encourage other lenders to do the same."
A number of major lenders, including Abbey and Alliance & Leicester, which are both part of Spanish banking giant Santander, have cut their rates since the beginning of the month.
But despite these reductions, the average cost of a two-year fixed-rate mortgage has fallen from only 5.13% at the beginning of October to 5.10% now - still well above the Bank of England base rate of just 0.5%.
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