Take advantage of the mortgage price war

Lenders are slashing their mortgage rates. Could you get a better deal?

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A number of mortgage lenders have moved to cut their interest rates this week.

Santander is the latest, dropping its cheapest five-year fixed rate to 2.99% for borrowers with a 30% deposit. However, you need to have its 123 current account to qualify.

Other lenders cutting rates this week include Metro Bank, Norwich & Peterborough Building Society, Halifax, Skipton Building Society, Nationwide Building Society and HSBC.
Rate cuts

Metro Bank has cut its five-year fixed rates, with its cheapest mortgage costing the same as Santander's at 2.99%, though with Metro you need a larger 40% deposit. If you only have a 30% deposit, you can get a 3.19% rate.

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Skipton has cut rates across its two-year fixed rate mortgage range by up to 0.4%, with its cheapest deal now starting at 1.92%.

Halifax has focused on its remortgage range, chopping rates on two- and five-year home loans by up to 0.3%, while Norwich && Peterborough has cut rates on its 95% loan-to-value mortgages by 0.2%.

To see if these cuts are enough to make their mortgages market leading, have a look at The best fixed rate mortgages.

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Why rates are falling

With so much talk of late, at least until earlier this week, about the Bank of England Base Rate finally being increased from its current record low of 0.5%, it may seem an odd time for mortgage rates to be falling.

However, that's because the main driver when it comes to pricing mortgages is actually swap rates, which are basically the rates at which lenders borrow money from each other. And as that's got cheaper of late, lenders are able to offer cheaper mortgages and still make money from them.

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