The lender, which offers it products direct to customers and not through brokers, said its lowest rate on offer is now 4.13% for new customers or 4.10% for existing borrowers.
This rate is available for the 5 Year Fixed Standard mortgage for customers who need to borrow up to 60% of their property’s value.
But it has also slashed rates on products for those with smaller deposits. It said it had applied some of its largest rate reductions to higher loan-to-value (LTV) mortgages of 90% and 95%, with cuts of up to 0.29%. Its 5 Year Fixed Standard at 90% LTV is now priced at 4.74%.
The most significant reduction is available for remortgage customers on the 2 Year Fixed Standard mortgage at 85% LTV – this is now available at 5.04%.
Liam O’Hara, head of mortgages at first direct said: “We’re really pleased to be starting the New Year with rate reductions across all of our repayment ranges of two- three- and five-year fixed rate mortgages.”
He added: “We will continue to review our pricing regularly throughout the year to ensure we offer the best value we can for our customers.
“There’s also lots of other ways we help our customers get the best value from their mortgage beside the interest rates we offer: our mortgages are fully flexible with free unlimited overpayments on all our ranges, we offer 40-year maximum terms and our product booking fees are capped at £490.”
The price cuts come just a day after HSBC made a number of price reductions to its mortgage range and after Leeds Building Society also reduced its rates.
Nicholas Mendes, mortgage technical manager at John Charcol, welcomed these price changes – but does he think we’ll see more lenders follow suit?
“It’s been a positive start to the new year,” he said, “with competition slowly increasing among mainstream lenders. The rate cuts, such as those from first direct and HSBC, highlights that lenders are keen to attract borrowers, but the scope for reductions remains limited.
“While we’re likely to see further rate cuts over the coming weeks, these are expected to be modest, with only minimal changes to the best deals currently available.”
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