Britannia cuts fixed-rates

Britannia Building Society has cut the cost of some of its fixed-rate mortgages by up to 0.6%

The lender is now offering its two-year fixed-rate deal from 3.59%, meaning that new customers borrowing £150,000 at 60% loan-to-value face monthly payments of £760.21 on a 25-year term.

An arrangement fee of £549 will be added to the cost of the loan.

In further consideration of potential borrowers, Britannia is reminding homeowners to look beyond the headline rate when choosing a mortgage.

The lender’s managing director, Tim Franklin, explains: “Although there are some great rates available in the market at the moment, it’s important that borrowers look at the overall package, not just the headline rate.”

Mr Franklin admits that in a round-up of rates, Britannia does not offer the lowest available.

However, he adds: “On a true cost basis, taking into account the arrangement fee and valuation, they offer some of the best value in the market.”

In related news, Britannia was listed among a number of UK building societies to have their credit ratings downgraded earlier this week.

Credit rating agency, Moody’s, negatively reassessed a number of lenders, including Nationwide, on fears that the global financial crisis will lead to higher credit losses than previously anticipated.

In this respect, the firm predicts that specialist loan sectors, such as buy-to-let and self-cert will come under pressure.

The Building Societies Association has responded by saying the downgrades are based on “a very pessimistic house price scenario”; Moody’s has assumed that the UK housing market will see a 40% peak-to-trough fall.

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