First Direct has halved mortgage fees across its product range and dropped rates on its fee-free deals.
The lender’s fees have been reduced from £1,450 to £725 in response to consumer demand but rates have been raised by up to 0.2 percentage points.
First Direct’s revamped range includes two-year fixes at 1.24 per cent to 60 per cent LTV and 1.34 per cent to 75 per cent LTV.
Five-year fixes include deals at 1.74 per cent to 60 per cent LTV, 1.89 per cent to 70 per cent LTV and 2.09 per cent to 90 per cent LTV.
The lender’s fee-free range has undergone rate cuts of up to 0.1 percentage points.
It includes two-year fixes at 1.49 per cent to 60 per cent LTV, 1.59 per cent to 70 per cent LTV and 1.74 per cent to 80 per cent LTV.
A five-year product is available at 1.99 per cent to 75 per cent LTV.
Nick Harrison, head of products at First Direct, said: “We always aim to offer outstanding customer value, and customers have told us they’d prefer fee free or lower upfront fees with their mortgage so we’re acting on this.
“There’ll be some rate changes to accommodate this, but it will help provide an even more attractive proposition to customers looking to remortgage or purchase their first home.”
Phil Anderson, director at Aberdeen-based Phil Anderson Financial Services, said: “Some clients can be put off by higher fees, and then you get others who, if you are saving more on the interest rate, are happy to pay a higher fee.
“Most clients are attracted to something where the fee is a bit less. When you get to £1,500, people start to think ‘that is a bit steep’.
“These changes will probably benefit the majority of people and make their range more attractive.”
simon.allin@ft.com
