Potential buyers are being advised to take a look at lower rate offerings from Nationwide and Barclays, but are also being warned that a price war could lead to even better rates.
Recently Nationwide and Barclays dropped their fixed and tracker mortgage rates to 0.3 and 0.4 per cent respectively.
However, Legal & General Mortgage Club has said that end borrowers shouldn’t jump excitedly to snap up these rates, as other lenders will also have to compete at some point.
Managing director Ben Thompson said: “The decision for borrowers right now is not so much who can beat these rates today, as they are almost unmatched, it is more a case of who else will join this stiff competition on pricing and what deals can we expect in coming days and weeks?
“Where appropriate to an individual borrower’s circumstances, these rates are well worth taking and doing so would lead to few if any regrets further down the line. The upshot is in historical terms these rates are low.”
Thompson added that the rates were aimed at “low risk” customers with large equity or deposits. But, he added: “If this competition does persist, it may force lenders up the risk curve in search of margin, eventually benefiting those with lower deposits and equity.”
