Cheltenham and Gloucester cuts mortgage rate
Cheltenham and Gloucester cuts mortgage rate: Another sign of a thaw in the frozen credit market today as the Cheltenham and Gloucester made its third cut in three to its mortgage rates in as many weeks. C&G cut the rate on its 1½-year and two-year fixed rate loans by 0.14% to 6.05% and 6.15% respectively, while the rate on its three-year fixed loans dropped 0.1% to 6.19%. These aren’t huge falls of course and aren’t much going to affect the affordability of your mortgage. Cutting 0.1% from a £100,000 mortgage will save borrowers £8.30 a month. But coming on the heels of cuts by Nationwide, HBOS and the Woolwich in recent weeks it comes as a reaction to drops in the interest rate swaps, a rather complex derivative, but which is crucially pegged to the interbank lending rate. All that suggests that banks, albeit slowly, are beginning to lend money to each other once again.
What it doesn’t mean is that lenders are touting for sub prime borrowers any more. The entry fee for mortgages is high, with all the C&G loans having a maximum loan to value of 75% and an arrangement fee of £995. Money may be getting marginally cheaper, but for those who really need a mortgage it’s still horribly hard to come by.
Tags: credit crunch, subprime mortgage, Cheltenham and Gloucester, UK mortgage rates
