At the close of last year, many mortgage experts were predicting that mortgage rates would start to steadily increase and as the fourth quarter progressed most of the larger banking and lending institutes had already started to slowly increase their rates. This made many analysts concerned that first time home buyers would continue to get shut out of the mortgage market and that the housing market in general would stall again as customers found that they had no other offers on the table.

However, just this week a few of the major lenders have actually reduced their rates, breathing some fresh air into the mortgage industry. Co-Operative made headlines this week by slashing their fixed mortgages by as much as sixty base points, offering those who have not yet remortgaged a shot at getting some great rates before they actually do increase.

First time buyers can also benefit from the high LTV’s that many thought would disappear as it offers them a chance to get onto the market without a large deposit. In some cases, there are even some high LTV’s that do not have any fees attached to them making a home purchase seem a bit more practical.

Included in the discount are fixed mortgages that feature a twenty base reduction with an 85% LTV. The new rates for these are 3.79% or 3.99% depending on whether the loan applicant can afford to pay the £999 product fee or not.  Head of mortgages James Hillon for Co-Operative Bank stated that in the wake of the eurozone crisis there are many lenders that were quick to increase their mortgage rates, but their banking institute is committed to going against the wave and instead helping to build the housing market back up.

Hillon added that outside of lowering their mortgage rates, they also have many different LTV’s available to help all types of home owners get back into the market.  Some of the offers do not even have fees with slightly larger rates instead, to help those who cannot afford the upfront costs of securing a mortgage.

Most of the three year fixed rates offered by Co-Operative have dropped from ten to fifty base points with one 90% LTV coming in at 3.89% which, for the current state of the mortgage market, is a reasonable deal.  Nationwide also announced similar deals this week that have made consumers evaluating their options.