mortgagesandnews

Abbey is to reduce its rates for some mortgages, partly in response to the Bank of England’s liquidity scheme which will inject £50bn ($99bn) into the mortgage market.

The UK’s third largest mortgage lender, owned by Santander of Spain, said it would reduce rates on its flexible and tracker mortgages for new customers by 10 basis points from the end of the week. It would also change its rates on fixed-rate mortgages available through brokers and branches.
Two-year fixed-rate deals for borrowers who have a 25 per cent deposit will come down by 11 basis points, although rates on other fixed-rate products at higher loan-to-value ratios are being held or slightly increased.

The bank said the moves were in response to the Bank of England’s cash injection and take effect from Friday when a two-year tracker rate mortgage will be 6.02 per cent. The bank said: “Whilst the mortgage market remains challenging, Abbey are pleased to be in a position to improve some rates available to our customers. We will continue to offer competitive products whilst still being careful to balance this against the need to maintain service levels for our customers, given recent competitor moves.”

Abbey announced earlier this week it had taken advantage of the disarray among its rivals by grabbing almost 16 per cent of the mortgage market in the first three months of the year.

Wave, a division of Merrill Lynch, the US investment bank, has announced it has temporarily ceased mortgage lending. The division, which lent to customers including those with patchy credit records, said it had acted because there were no signs the securitisation markets would reopen in 2008.

This week the Royal Bank of Scotland said it would cut rates on fixed and tracker loans sold through its branches to new and existing customers by up to 30 basis points.