Smaller loan rates on offer

Good news for homeowners and buyers. This week saw more lenders drop their standard variable mortgage rates following the surprise interest rate cut nine days ago.

Abbey National has cut its standard rate by 0.15% to 5.79%, which means a borrower with a typical £100,000 interest-only mortgage will see their monthly bill fall by £12.50. Of course, the saving would have been bigger if Abbey had passed on the full 0.25% cut.

Meanwhile, homebuyers and remortgagers looking to take out a fixed-rate loan are spoilt for choice because there are some very competitive new deals.

The Halifax this week cut rates on its new fixed-rate mortgages by up to 0.65%, and says its two-year fix of 3.79% is the lowest it has ever offered. This rate is available to first-time buyers and people moving home (not remortgagers), and there are no early redemption penalties after the two years - but you must be able to put down a deposit of at least 20%. There is a £199 arrangement fee.

The MarketPlace at Bradford & Bingley is offering an even lower rate - a "market-leading" 3.69% two-year fix - but the fees you have to pay are slightly higher. The deal is funded by the Woolwich, and redemption penalties only apply during the fix.

Minimum deposit is 5% (10% for those remortgaging) and you can repay up to 25% of the loan penalty-free per year. But there is an arrangement fee of £295, a £49 booking fee and a "credit broker fee" of 0.4% of the sum borrowed, minimum £200 (there is no credit broker fee to pay if you take out the deal online).

For those looking to fix their monthly mortgage payment for a longer period, Leeds & Holbeck building society has a new five-year deal fixed at 4.29% until May 1, 2008. Minimum deposit is 5%, there are no overhanging redemption penalties, and overpayments are allowed. However, there is a completion fee of £399 for loans up to £200,000. For bigger loans, the fee is £399 plus 0.25% of the advance above £200,000.