London Mortgage Rates Down Friday, 16th May 2008

Following Nationwide’s announcement earlier this week that it will also reduce some of its rates by up to 0.3% from today,Abbey has reduced the rates on all flexible and tracker-rate mortgages by 0.05%, in addition to reducing some fixed rates by up to 0.17% for borrowers with higher deposits.

The changes, made today, follow Nationwide’s announcement earlier this week that it will also reduce some of its rates by up to 0.3% from today.

As a result of the changes, Abbey’s five-year fixed-rate mortgage now has a rate of 5.75% (£1,499 fee). Other products include a two-year fixed rate at 5.95% (£995 fee), a three-year fix at 5.87% (£999 fee) and a two-year tracker deal at a rate of 5.97% (£999 fee). All new rates apply to loans of 75% loan-to-value (LTV) for both homebuyers and remortgage customers, and include a free valuation and help with legal costs.

A spokesperson for Abbey Mortgages said the lender’s sensible approach to risk over the last two years has allowed it to reward lower LTV business with competitive rates.“The current mortgage market poses an opportunity for financially strong lenders such as Abbey,” the spokesperson continued. “Last month we announced a UK net lending share of 16%, and since then we've seen an exceptionally strong pipeline of new business, as well as continuing to benefit from the improvements we've made in retaining our existing mortgage customers.

“Abbey had already decreased rates on its flexible rate and tracker mortgages by 0.1% in response to the Bank of England's recent cash injection. This additional 0.05% reduction anticipates future falls in LIBOR (London Interbank Offered Rate – the rate at which banks borrow from each other to fund their mortgage lending) and will further support the Bank of England's action in helping to bring liquidity back to the UK mortgage market.”

Use our mortgage calculators to work out the difference a rate change could make to your monthly repayments.