Home Loan Lenders Cut Mortgage Rates

Three of the top mortgage lenders dropped their interest rates yesterday ahead of the Bank of England's base rate setting decision. Abbey, Lloyds SB and Cheltenham & Gloucester declared a drop of up to 0.30%. It was the fifth drop in a month by Lloyds TSB. Skipton Building Society also also annouced it now had on offer 95% per cent loans available for first time buyers.

The Bank of England maintained the base rate at five per cent today as economists predicted.  This now means that the cost of a mortgage is now at levels not seen since the start of the credit crunch. This can only be seen as good news as the number of secured loans approved in July rose slightly over the previous month. The reductions are as a result of the reduced swap rates, the rate at which the banks lend to each other, falling over the last few weeks.

However, this news comes a little too late for all the people struggling with repayments. Repossession demands are soaring as home owners fail to repay their loans.  The number in danger of losing their homes has risen by nearly a quarter in the past year. In recent months, as fixed rate loans are expiring, owners are having to remortgage at significantly higher rates. Because of the current economic situation, a lot of lenders are now risk adverse and a lot of are finding it hard to remortgage, especially those who have little or no equity in their property.