New deals increase mortgage competition

08/10/2009

Financial information service Moneyfacts.co.uk has commented on the "flurry" of new best-buy mortgage rates released so far this month.

Reductions in home loan deals have been made by lenders including Abbey, Nationwide and Woolwich.

Government-owned Northern Rock has also cut some annual rates by 0.3 per cent.

The reductions represent an increase in competitiveness in the UK mortgage market, which has tightened considerably as a result of the credit crunch.

However, many people with large debts or patchy credit histories are still being shut out of best-buy deals, meaning that they pay more interest on their mortgages and suffer a greater repayments burden overall.

Louise Holmes, a spokeswoman for Moneyfacts.co.uk, commented: "Such positive steps certainly make for refreshing news and are a move forward from the barrage of criticism suffered by lenders over the past months.

"Banks and building societies may be launching products with a view to competition, after a lengthy period focusing solely on risk."

Latest data from the Council of Mortgage Lenders shows that UK loan approvals fell by 13 per cent in August.

Year on year, approvals had fallen by 37 per cent.

Tags; Housing Debt and Bills, Young Family Finances,

Regional Debt Advice; Debt Advice Woolwich,

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