It may only be the middle of January but we have already seen a number of lenders reduce mortgages rates this year. Among them is Principality Building Society. It has launched a mortgage that is fixed at 3.44 per cent until 31 March 2010, which is market-leading over a two-year term. There is a £999 arrangement fee and an early redemption charge applies during the fixed term.
This deal is available to those remortgaging, home movers and first-time buyers. However, many people, first-timers in particular, may struggle to qualify for this product because a deposit of at least 35 per cent is required.
Given that the Bank of England base rate has not changed since March last year, it is a positive sign to see mortgage rates edging downwards. The last few years have been a tough time for borrowers with banks and building societies reluctant to lend. While the mortgage market is still very different to that of the pre-credit crunch era, an appetite to lend does seem to be returning slowly.