Mortgages  

Rate war: Accord Mortgages offers 1.54% at 65% LTV

Accord Mortgages has made cuts to its two, three and five-year fixed-rate loans for borrowers with a 35 per cent deposit.

Two-year fixed-rate mortgage have been lowered to 1.54 per cent at 65 per cent loan-to-value with an £845 product fee.

Two-year fixed-rate mortgages are also available at discounted rates of 1.74 per cent, with a £250 cashback on completion and free standard valuation, and 1.59 per cent. A £345 product fee is applicable on both deals.

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In addition, three-year fixed-rate mortgages with a £845 product fee are now available at reduced rates of 2.14 per cent and 2.24 per cent with a £250 cashback on completion and free standard valuation.

The provider, which is the intermediary lending subsidiary of Yorkshire Building Society, has also cut five-year fixed-rate mortgages with an £845 product fee to 2.34 per cent.

What is more, the rates for two-year fixed rate remortgage products have been lowered – each offering free standard valuation and free standard legal services.

Reduced rates of 1.74 per cent and 1.79 per cent have also been made to two-year fixed-rate loans at 65 per cent and 75 per cent LTV, both with a £345 product fee.

At 80 per cent LTV, two-year fixed-rate loans have been cut to 1.94 per cent – also with a £345 product fee.

Furthermore, rates have also been reduced on fixed-rate mortgages from 75 per cent to 85 per cent LTV.

Provider view

David Robinson, national intermediary sales manager at Accord Mortgages, said: “We think these latest rate reductions will appeal to brokers and borrowers looking for value for money from their fixed-rate mortgage. Cashback on completion and free standard valuations help borrowers to keep down the upfront costs of taking out a mortgage. We are confident the highly competitive rates on offer will make these mortgages appealing to brokers and borrowers.”

Adviser view

Mike Richards, director at Mortgage Concepts Associates, based in London, said: “These offerings are very competitive.

“If you go back four or five years ago, rates for five-year mortgages at the same [65 per cent] loan to value were between 5 per cent and 6 per cent.

He added: “Accord is not the easiest lender to get into – it has strict policies – but its products are generally very competitive.

“There appears to be a rate war going on in the mortgage marketplace at the moment, with more and more lenders slashing their rates with the aim of getting a big chunk of the market.

“Taking out tracker mortgages are no longer as appealing when fixed rates are their current level.”

Charges

Product fees range from £345 and £845.

Verdict

Since the start of the year, lenders have been quick off the mark to announce reductions to their fixed-rate mortgage products. Basic economics tells us that such a move will encourage competitors to follow suit so as not to risk losing their customers to a rival provider. This would undoubtedly come as good news for customers.

These cuts are a clear indication of Accord’s intention to lead the market. Borrowers who may be put off by the £845 fee for the two-year fixed-rate product at 65 per cent LTV, would be pleased with a cheaper option – albeit at a slightly higher rate.