First direct slashes rates by up to 0.5%

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HSBC-owned bank first direct has cut interest rates on more than a third of its mortgage deals – that's 20 out of the 58 different offers in its current range.

The biggest cut of 0.5 of a percentage point is on the 85% loan-to-value (LTV) five-year fixed-rate deal with no fees, which now charges 4.49%.

For 65% LTV, it's also cut the rate on the five-year fix to 3.49% with a £1,499 fee. The lowest five-year fixed-rate on offer at the moment is Chelsea Building Society's 3.29% with a fee of £1,495 on 70% LTV.

On a smaller deposit, the first direct deal appears to be the market leader at the moment - its nearest rival is its owner HSBC with 4.89% on 90% with no fee. And it's not far behind on larger deposits either, at just 0.2 of a point more than Chelsea.

First direct has also chopped the rate on its 65% LTV offset tracker to 1.58% plus base rate - making a current pay rate of 2.08%. There is a £1,499 fee with this deal.

The two-year fee-free tracker on 85% LTV is now 2.99% plus base rate. The cheapest two-year tracker rate is currently Santander's 1.45% plus base, making a current rate of 1.95% with a whopping £1,995 fee on a maximum 60% LTV.

Although trackers are cheaper than fixed rates at the moment, most new borrowers appear to prefer the certainty offered by a fixed deal. For first-time buyers, five-year fixed deals are often popular as they offer the certainty of repayments during the expensive early years of being a first-time homeowner.

 
 
Lender Initial Rate Duration Standard Rate Overall Cost For Comparison Max Loan To Value Fee
1.99% 2 years 3.94% 3.7% APR 60% £1499
2.45% 2 years 5.69% 5.4% APR 75% £999
2.49% 2 Years 5.19% 4.9% APR 75% £495
2.49% 2 years 4.99% 4.7% APR 70% £499
2.5% To Feb 2014 3.5% 3.4% APR 60% £1945
2.59% 2 years 5.64% 5.1% APR 75% £990
2.65% 3 years 5.49% 4.8% APR 75% Nil
2.69% 2 years 4.99% 5% APR 75% £795
2.74% To Dec 2013 4.99% 4.8% APR 75% Nil
2.89% 2 years 4.99% 4.7% APR 75% £795

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