A big deposit means a lower fixed rate mortgage
Last week, interest rates were cut by a number of mortgage lenders for buyers who were able to put down a sizable deposit. If you’re able to raise a 60% deposit on a new home, you can take advantage of a 3.19% rate with the Alliance & Leicester, subject to a 2% fee. For a slightly smaller 25% deposit home buyers can find rates at 3.69%.
If you have a 60% deposit and want to pay less than the 2% fee, can you pay a 1% fee and take a rate at 3.69% which is fixed for two years, or you can have a rate of 4.19% if you have a 25% deposit.
Royal Bank of Scotland also reduced their mortgage rates last week, offering a rate of 3.99% on a fixed two year deal when you have a 60% deposit and a £799 fee. RBS is also offering a rate of 4.14% for a 25% deposit and a £999 fee.
HSBC has a similar offering with a 3.99% two year fixed rate available with a deposit of 60% and a £999 product fee.
The best rate HSBC offer is their two year discount mortgage. This mortgage offers a rate 0.95% under their standard variable rate. This means that in February the interest rate on this mortgage offer will be 2.99%. This offer isn’t available to everyone though as only Premier customers of HSBC can take advantage of this offer.
Posted on January 18, 2009
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