The largest lender in the UK, the Halifax, is cutting some of its mortgage interest rates for new customers as of today. This is the third mortgage rate cut the Halifax has announced this month.
Sixteen different mortgage deals will see cuts to their rates, with some being reduced by up to 0.3 percent, helping new mortgage customers get into a property by reducing their monthly repayments. A Halifax spokesman explained that they were keeping up with recent changes in interest rates by other lenders, ensuring they are competitive. 2 year fixed rate mortgage rates for example were unchanged since they had been reduced only a week ago.
In a market where property sales are down by about half compared with last year and mortgage approvals are down by over two thirds it remains to be seen whether these changes will significantly impact on the housing market, though the Halifax will surely be hoping it does.
The latest Halifax house price report showed a slide of 1.7 percent for the month of July, taking the overall decrease for the year to date to 8.8 percent.
A Halifax spokesman said that increasing demands on consumers income as well as much tighter mortgage lending criteria is making it very difficult for people to get into the market, with a natural decline in prices to try and stimulate interest.
On the topic of mortgage approvals, which really drive the housing market, they are down by almost 70 percent compared with the same time last year according to Halifax figures. This leads to the real market, that is those who can finance a move, shrinking considerably and in many cases almost cutting off completely the first time buyer.
Well known high street building society the Alliance and Leicester has just announced some new mortgage offers offering a variety of options for housebuyers.
Fixed rate mortgages are very popular right now as people look to get some stability with their repayments. To this end the Alliance and Leicester mortgage offers include two new fixed rate options. Their five year fixed rate deal will cover up to 90 percent of the property price and stands at 7.14 percent interest. There is also a shorter two year rate, quoting just 6.14 percent interest but restricted to those able to put down a deposit of 25 percent or more.
Catering for the variable rate market the Alliance and Leicester have also introduced a tracker mortgage that follows the Bank of England base rate. Of course this does not ensure a fixed repayment amount but the interest rates are currently lower than the fixed rate alternatives so can prove enticing.