Co-operative Bank slashes mortgage rates

The Co-operative Bank has slashed its fixed mortgage rates by up to 0.6% in a further sign of growing competition among lenders.

The bank, which will re-launch its fixed rates on Friday, is cutting a five-year 75% loan-to-value (LTV) deal by 0.6% to 4.19%, with a £999 fee.

For those looking for a two-year fixed-rate deal with a 25% deposit, the Co-operative is offering a deal of 3.59%, a 0.4% reduction, with no fee.

The bank has shaved 0.2% off another five-year deal for those with a 10% deposit, to offer a rate of 5.99% with no fee.

Borrowers have benefited from a raft of recent rate cuts, with the Bank of England's historic low base rate expected to remain at 0.5% until 2013.

MoneySupermarket released data last week showing fixed two-year mortgage deals generally had reached a record average low.

Personal finance analysts at Moneyfacts said a deal recently announced by Leeds Building Society still leads the market, but that the Co-operative offers would appeal to borrowers.

Leeds Building Society ramped up the competition by launching its lowest ever two-year fixed-rate mortgage, at 1.99%, available at up to 75% loan-to-value.

Yesterday Chelsea Building Society announced that it had entered the offset mortgage market - where a borrower's savings are set against their mortgage debt - offering offset on all its standard mortgage range.

Last month the Post Office slashed rates on a range of "first-time buyer-friendly" products.

PA