Competition hots up in the mortgage market

"Two Swallows do not make a summer", said Louise Cuming, head of mortgages at moneysupermarket.com, "but it is very encouraging to see two lenders reducing the cost of borrowing and making those deals available at higher loan to values.

"There have been some great deals on mortgages around recently, but by and large the eligibility criteria have restricted them to people looking to borrow at low LTV (loan to value) which is of little help to many existing borrowers. It is great to see Woolwich and National Australia Bank (via its Clydesdale and Yorkshire Bank brands) making better deals available at higher LTVs.

"Barclays pledged to increase lending to homeowners by £5.5bn and to deliver on this promise it is cutting the mortgage rates offered under its Woolwich brand. The Woolwich range is now nearing the top of the best buy tables - although it's not yet best in class - for two and five year fixed rates. But despite not offering the most competitive products in every case, as a range it is moving in the right direction, and this constructive initiative should to be applauded.

"It is encouraging to see Woolwich have raised the loan to value (LTV) rate on their best deals, meaning that affordability will now have more reckoning on borrowers obtaining the mortgage they want. Whilst equity remains king elsewhere, it might be worth prospective borrowers waiting a short while to see if other lenders follow suit and offer their top deals at more attainable LTV rates."

"Clydesdale Bank and Yorkshire Bank are to be congratulated for making it easier for borrowers to access mortgage deals. These providers are the only national players currently offering mortgages up to 95 per cent, and to then also waive arrangement fees across a range of products shows a real commitment to kick starting the mortgage market."