Mortgage rate cuts from Post Office and Northern Rock

Both Northern Rock and the Post Office have launched new mortgage deals with lower rates.

The Post Office has cut the cost of its Bank of Ireland lifetime tracker loans from 3.29% to 2.99%, or from 3.59% to 3.49%, dependent upon the loan-to-value ratio.

Bank of Ireland has also reduced the price of its five-year fixed-rate offering by 0.5% to 5.25%.

Meanwhile, nationalised lender Northern Rock is offering a two-year fixed-rate deal at 3.69%, down from 3.89%.

The news follows Skipton Building Society’s recent decision to hike its standard variable rate (SVR) from 3.5% to 4.95%, from 1st March.

The lender evoked an “exceptional circumstances” clause that has allowed it to remove a cap of 3% above base rate on its SVR.

The directions of Northern Rock’s and Skipton’s rate changes support claims that the UK’s building societies are at a disadvantage alongside banks that have been bailed out by the taxpayer.

The mutuals have been struggling to compete since the credit crisis brought regulatory changes that require lenders to hold more capital, partly because they are limited in the ways in which they can raise funds.

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