A&L launches two-year tracker at 2.95%

Alliance & Leicester (A&L) has launched a two-year tracker at 2.45% above base rate (currently 2.95%).

The mortgage is available to both homebuyers and remortgagers who can stump up a deposit of at least 25%. It comes with a fee of £499 and the maximum loan size is £250,000.

According to the lender’s director of mortgages, Nici Audlam-Gardiner, research shows that among remortgagers, “one-third are looking for a tracker and of those, over half will choose a two-year tracker”.

She adds: “The 2-year tracker is second in popularity only to a two-year fix and with a best buy rate of base rate plus 2.45%, borrowers should seriously consider this deal.”

The new tracker follows A&L’s launch of fee-free three and four-year fixed-rate deals, also available for remortgagers and homebuyer, at 4.69% and 4.79% respectively. Both have loan-to-value ratios of 75%.

Mortgage broker, John Charcol, recently urged remortgagers and first-time buyers considering a fix to act sooner rather than later.

A number of lenders are still lowering their fixed rates but the trend could soon reverse.

The firm explained that gilt yields for maturities of five years or more have fallen since the Government embarked on quantitative easing.

As a result, the money market swap rates that determine the cost of fixed-rate mortgages look set to rise in the near future.

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