Abbey National cuts mortgage rates

Abbey National today announced the launch of a new range of lower-priced fixed rate mortgages. The range, which comes into effect from tomorrow, represents some of the lowest fixed rates the bank has ever offered.

The headline new rates include a two-year fix at 3.84% (down from 4.05%) and a five-year fix at 4.59% (down from 4.69%). Both are available to all new customers. The bank has also cut the rates on a number of its tracker mortgages, while increasing the loan-to-value ratio (LTV - that is, the percentage of the value of the property you are allowed to borrow in your mortgage), meaning more customers are able to take advantage of the lower rates. The two-year tracker available to all new customers is now offered at 3.45% up to 90% LTV (down from 3.94% up to 75% LTV).

Abbey's new rates mean it is now a good bet on the high street - Halifax and Nationwide, two of the UK's biggest mortgage lenders, offer two-year fixed rate mortgages of 3.99%, which Abbey National undercuts by a substantial 0.15%. However, it is still possible to do better: Britannia building society offers a two-year fix of 3.39%, while Charcol (funded by Newcastle building society) has fixed at 3.59% (source: Moneyfacts).

Commenting, Guy Aldwinckle, head of mortgage marketing at Abbey National, said: "The 3.45% tracker is very competitive and fixed rate deals are also looking very attractive, especially for first time buyers who want the added security of a fixed rate deal."