Mortgage consumers are benefiting from a price war currently being waged between banks and building societies that has contributed to the significant trimming of the cost of deals. Consumers may well have to react quickly in order to get the very best mortgage rates, however as just last week the smaller-sized Hanley Building Society withdrew its highly popular two-year fixed-rate at 2.95% for borrowers with a 25% deposit after only three days. As far as sub-3% rates are concerned, the best current bets are Barclays, the Yorkshire Building Society and the Alliance and Leicester. The Yorkshire Building Society currently offers 2.99% for people putting down a 40% deposit and they charge a fee of £1,795. HSBC’s rate is exactly the same, although they only require borrowers to have a deposit of 30%. Their fee is also lower, at £999, providing good balance for first-time buyers able to take this option.

The Alliance and Leicester offers a rate of 2.89% for borrowers with a 30% deposit, although their fee is 2% of the amount borrowed, so it will be that much higher on a typical level loan of £150,000, standing at £3,000. For those with bigger mortgages, Barclays may be something of an alternative, as it charges 2.98% for a 30% deposit with a fee of £1,999. A further stipulation is that a customer must borrow a minimum of £250,000. Market experts and analysts have reacted fairly positively to the morass of figures, with many believing that such rates in the lending market bode well for the property market in general. According to David Hollingworth, a broker from London and Country, the figures represent fairly good news all round: “The knock-on effect of these price changes that we have seen is that rates in the tier above this are also getting that little bit cheaper.” No doubt market analysts will watch as political uncertainties regarding a possible hung parliament in the upcoming General Election play out with respect to any market ramifications, as well as key market indicators such as unemployment figures and interest rate rises.