Mortgage rate falls

The UK’s third biggest lender is reducing all five-year fixed mortgage rates by 0.1 per cent and all two-year tracker rates by 0.15 per cent.

This means the five-year fix will be offered from as low as 3.79 per cent with a £900 fee, although this product is dependent on the borrower having a 70 per cent loan-to-value ratio.

Fixed mortgage rates have fallen to record lows in recent months but analysts have urged borrowers to act fast as they are unlikely to get any cheaper.

The reduction in the price of fixed rate mortgages is being driven by a fall in swap rates, upon which the deals are partially based, as the Bank of England’s Monetary Policy Committee is expected to put off raising the base rate of 0.5 per cent until next year.

The flurry of lenders slashing their rates in the past few weeks has included big names such as Halifax, Lloyds TSB and NatWest.