Major lenders launch ranges

Alliance & Leicester, Woolwich and Cheltenham & Gloucester were among the big-name lenders launching mortgage ranges this week.

With many commentators talking about a possible interest rate cut, homebuyers and remortgagers who believe rates will remain low for the next couple of years may want to opt for a two-year discounted rate mortgage.

Alliance & Leicester is offering a decent rate - a 2.25% discount off the basic variable rate, giving a current pay rate of 3.7%. Customers can borrow up to 95% of the property's value and there's no early redemption penalties, but there is a £295 arrangement fee.

Other good two-year discount deals include Bristol & West, Staffordshire building society and Bank of Ireland, all offering loans with a current pay rate of 3.79%, according to mortgage broker Savills Private Finance. All allow cus tomers to borrow up to 95% and have redemption penalties in the discount period only.

For those on tighter budgets who want certainty with their monthly payments, there's probably never been a better time to go for a fixed rate deal. A&L is doing a two-year fix at 4.44% - you can borrow up to 95%, there's a £295 fee and there are penalties during the fixed period only.

If you want a longer fix you shouldn't have a problem finding a five-year deal at under 5% -Woolwich was one of several lenders which this week launched a deal at 4.99%.

There are deals even cheaper than this. Broker Charcol's Charcolonline website highlights Bristol & West's 4.89% five-year fix. Minimum deposit is 5% and there are some penalties.