Abbey cuts rates for customers with smaller deposits

Abbey is cutting rates by 0.6 per cent on its mortgages for customers with a 15 per cent deposit, as well as introducing five new deals to this range. It is also reducing fees on these products by up to £1,000, so the 85 per cent LTV range - which is available for borrowing of up to £550,000 - now starts at:

6.34 per cent with £995 fee for a 2 or 3 year fixed rate
6.44 per cent with £995 fee for a 2 or 3 year variable rate

Abbey is also cutting rates on some of its 70 and 75 per cent loan to value mortgages by up to 0.1 per cent. Deals available at 70 per cent LTV now start from 5.54 per cent with £1,495 fee (available for loans up to £250,000). Deals at 75 per cent loan to value now start from 5.74 per cent with £995 fee (available for loans up to £550,000).

In addition, Abbey is removing the need for customers to pay an element of the booking fee upfront. Previously customers were required to pay £150 of the booking fee on application with a choice to pay the remaining part of the fee upfront or add it to the loan on completion. This was to secure the rate given volatile market conditions and rising interest rates.

However, fixed rate interest rates have fallen substantially since then and market conditions stabilised. The removal of the need to pay £150 of the fee upfront means the customers is now able to pay the whole booking fee upfront or add it to the loan on completion. This means a customer choosing a product with free legal and valuation services can minimise upfront costs.

Phil Cliff, Director of Mortgages, said: "Abbey's aim is to provide a range of competitive deals for all customers - whether they have a small or large deposit. The rate and fee cuts, plus the new deals, mean we have an extremely competitive range for customers with deposits of 15 per cent or more.

"Fixed rate interest rates have reduced recently and as the market environment changes, we're able to pass these benefits to our customers. The upfront element of the fee is no longer necessary in the current market to secure the best rate for customers. The change means that people taking out loans of up to 85 per cent loan to value can add the whole booking fee to the loan if they wish."