Mortgage lenders launch cut-rate deals as inflation fears subside

Published 26th Apr 2011

A mortgage price war is heating up with lenders slashing rates on fixed-rate and tracker mortgages at the start of the spring property-buying season.

City fears of an imminent rise in the Bank of England base rate have dissipated and lenders are responding by cutting rates to attract homeowners looking to remortgage and first-time buyers with large enough deposits.

Woolwich, part of Barclays, has cut the rate on tracker and fixed-rate mortgages by up to 0.32 percentage points to encourage borrowers to switch rates, while Skipton has lowered its rate by up to 0.5 percentage points on its two-, three- and five-year fixed-rate products. Last week Halifax and Northern Rock cut the rates on buy-to-let mortgages by up to 0.4 percentage points.

Before March's inflation figure, some economists were predicting a base rate rise. But the drop in the consumer prices index from 4.4% in February to 4% last month changed their outlook and most now believe a rise will not happen until August at the earliest.

Source: ' TMC '

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