Lenders cut fixed rates

Commenting, John Charcol’s Ray Boulger, said: "Last week Chelsea, Coventry, Halifax, HSBC and Nationwide all cut some fixed rates and ITL mortgages expanded its range to include competitive 85% LTV fixed and tracker rates. With its new rates Coventry has adopted a different stance to most lenders by primarily targeting the low LTV remortgage market, with very competitive fixed rates for 3 and 5 years for LTVs up to 50% LTV at 4.25% and 4.99% respectively, both with a £999 fee and a free valuation and free legal fees.

"There are a number of reasons that account for why we are seeing these cuts. There is undoubtedly an increase in competition with a number of new lenders currently in the starting blocks waiting for the gun. Additionally, lenders are far less dependent on swap rates for their new funding, rather looking toward their savers to balance the books. It is also John Charcol's belief that lenders are becoming more comfortable with the wider economy, most notably the bounce in house prices and the expectation that interest rates will remain low for some time - resulting in far less repossessions than initially expected. And, underlying all this, is a modest improvement in wholesale funding."