UK lender A&L cuts some mortgage rates
August 27th, 2008 | by admin |LONDON, Aug 27 (Reuters) - British mortgage bank Alliance &Leicester (ALLL.L: Quote, Profile, Research, Stock Buzz) said it is cutting the rates on some of itshome loans.
A&L, which last month accepted a cash and shares offer worth1.3 billion pounds ($2.40 billion) from Spain’s Banco Santander(SAN.MC: Quote, Profile, Research, Stock Buzz), said the rate on two-year fixed loans of up to 250,000pounds will from Wednesday fall to 6.19 percent from 6.64percent.
The rate for two-year loans of between 250,000 pounds and 1million pounds drops to 5.99 percent from 6.14 percent. A&L isalso cutting the rate on three-year loans of up to 1 millionpounds to 6.89 percent from 7.09 percent.
Several UK mortgage lenders have trimmed their mortgagerates in the past two months in response to a decline in thecost of interest rate swaps, used by banks to price fixed-ratemortgages.
However, mortgage costs remain historically high, havingrisen sharply in the past year as banks stung by the creditcrunch seek to conserve capital and protect profits.
The abrupt rise in borrowing costs has slashed overallmortgage lending, with total UK mortgage approvals falling to22,448 in July, a decrease of 65 percent compared with the sameperiod last year, according to figures published Tuesday by theBritish Bankers’ Association.
According to financial services data group Moneyfacts, theaverage rate on popular two-year fixed rate loans stands at 6.9percent, up from 6.56 percent a year ago, while the rate onthree-year deals has risen to 7.13 percent from 6.54 percent. (Reporting by Myles Neligan; Editing by Jason Neely)
