Mortgages: 6.33% from Nationwide

Things are looking up for a reduction in mortgage rates, with LIBOR – the rate at which banks lend to each other and fund their mortgage books – falling below the 6% mark this week. There has also been a decline in swap rates, which determine the level of fixed rate deals.

‘Two year swap rates have continued to tumble and are now down to 4.33%,’ commented Kevin Duffy, Mortgageforce’s chief operating officer. ‘Lenders may have more space to reduce some rates now as this fall in their cost of funding starts to percolate through to their product pricing, particularly fixed rates.

‘Lenders will now start competing for low loan to value assets which improve their capital.’

But it probably won’t make much difference to the higher rates charged for those needing a loan of 75% or more.

Average tracker rates are now above the best rates available on fixed rates, so for those looking for a remortgage and now knocking up against the 75% loan to value threshold above which borrowing becomes more expensive, Nationwide is offering loans up to 85% LTV on a two year fix at 6.33% with free valuation and legal fees paid and an arrangement fee of £999. Full details at www.nationwide.co.uk.

Credit Cards: 3% cashback from Abbey

There is continuing anecdotal evidence that credit card issuers are turning down applications from people who are a good credit risk – because they don’t use the credit facility and they pay off the outstanding balance in full every month.