Northern Rock significantly improves its mortgages

6 October 2009

Ray Boulger, senior technical manager at John Charcol

Following on quickly from the significant improvement (reported in the previous blog post) to Woolwich’s lifetime tracker rate, Northern Rock is also getting in on the act with several good improvements to its product range from tomorrow.

Northern Rock is increasing the maximum LTV to qualify for its best rate from 65% to 70%, reducing its rates and also cutting the £995 arrangement fee for all residential purchases (but not remortgages) to £595.

The cheapest two-year (to 31/10/11) fix for purchases comes down by 0.34% from 4.09% to 3.75%.

But the rate to 75% is only being reduced by 0.16% to 4.55%. Thus the gap between the 70% and 75% rates is now 0.64%, which seems excessive for such a small LTV difference.

It is also excellent news to see a 0.5% reduction in its two-year buy-to-let fixed rates.

The rate to 60% LTV is down to 5.49% and the rate to 70% to 6.09%, both with an unchanged 2.5% fee.

With so little competition in the buy-to-let market it is particularly encouraging for that market to see such substantial reductions from Northern Rock, coupled with the improvements across the board to buy-to-let rates announced by The Mortgage Works from the end of last week.