Remortgaging price wars hit market

In the last week many lenders have introduced new deals to the market.

Santander is offering a record-breaking five-year fix at 2.99%, to borrowers with a 40% deposit.

The deal is extremely similar to HSBC’s new offering, although HSBC are willing to take on non-customers.

Both deals demand hefty deposits or equity and bring a £1,499 fee.

Cheltenham & Gloucester, Northern Rock and Principality all cut rates last week on deals for new customers. Principality cut up to 0.6%, while Cheltenham & Gloucester and Northern Rock made cuts of up to 0.2%.

The Royal Bank of Scotland cut its five-year fix for first-time buyers with a 10% deposit by 1.7%, down to 4.79%, whilst Halifax has removed upfront fees on its two-year fix for customers who are remortgaging.

With free legal and valuations available across the whole Halifax remortgage range, removal of the product fee and the mortgage account fee Halifax customers could save up to £1760.

Stephen Noakes, mortgage director at Halifax, explained the changes: "The attraction of remortgaging is the peace of mind it provides homeowners of knowing exactly what you are going to pay each month.

“Upfront costs can add up when remortgaging, unlike new buyers who factor in these costs, homeowners looking to remortgage can sometimes get caught out.

“By offering this to our remortgage customers we are helping alleviate the associated costs with remortgaging."

This is in addition to rate reductions announced last week, which saw Halifax reduce all of its two-year fixed and tracker products for remortgage customers by 0.20 percent.

Santander has also launched two new intermediary deals, via Abbey for Intermediaries. One is a 2.99% three-year fix and the other a five-year fix at 3.49%, available for loans of up to £500,000.

Despite the Bank of England base rate remaining at low levels, remortgage lending increased in May to £3.5 billion, up from £3.1 billion in April

So what will this mean for the market? With such a range of deals on the market will remortage lending continue to increase?

 

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