Mortgage market competition beginning to increase says London Mortgage Advice Wednesday, 11th November 2009

There are signs that the UK mortgage market is beginning to stir with former sub-prime lender GE Money set to return to the market this week offering prime mortgage products.

GE Money, having withdrawn from the market last year, will offer a one-year discount deal charged at 4.99% with a £995 fee, up to a maximum of 70% loan to value; a two-year fixed rate deal at 5.59% and a three-year fix at 6.04% with fees up to £1,995.

Another is Tuita, known primarily for bridging loans, is also expected to announce plans to introduce new mortgage deals this week atthe annual Mortgage Expo in London.

It has to be a welcome sight, lenders coming back in to the market as this can only put more pressure on the high street banks to lower rates.

In other quarters there are signs that the great mortgage freeze is starting to thaw, albeit slowly. Northern Rock, which is to be split into a ‘good’ bank and a ‘bad’ bank as soon as possible, has revealed that its good bank will lend £9bn in mortgages next year.

And then Woolwich have announced a new range of deals available at up to 75% loan to value for the first time in a year. The range includes two-year fixed rates at 3.99% and 4.09% and a lifetime tracker at 2.94% (Bank base rate + 2.44%) and 3.34% (Bank base rate +2.84%). In addition, the 70% loan to value tracker is being reduced from 2.79% to 2.77%.

This is the fifth time they have lowered rates since the beginning of September and there appears to be a trend in the market for lower rates and more competition.