Major UK lenders are lowering their rates on the cost of fixed rate deals.  Woolwich, Halifax, and Skipton pioneered the effort in making fixed rate deals more affordable.  Now, Nationwide is continuing the cost cutting, as its two and three year fixed deals are being slashed by up to 0.3%.  This has resulted in two of their products being more affordable to the most cost conscious borrowers.  The two and three year fixed deals can be taken advantage of at 2.89 and 3.3%, respectively.

David Hollingworth, of London & Country, commented on the renewed competitive spirit within the lending community due to the price cutting, saying: "This competition is sparked by lenders eager to ensure that they meet their targets.  That means fighting harder on price for the business especially as the lending market remains relatively subdued."

The fixed rate deal will be ideal for many in the market to obtain mortgage lending, whether it is for an original loan or a remortgage.  But a fixed rate deal is not ideal for all situations.  This has led Melanie Bien, director of Private Finance, to make the following comments regarding fixed rate deals: "Whether to fix depends on your circumstances, attitude to risk and what you think will happen with interest rates. The majority of our clients are opting for base-rate tracker mortgage, particularly those which are penalty free or have a 'switch to fix' option."

The latest Monetary Policy Committee meeting and subsequent decision to leave the base rate at 0.5% has prompted many lenders to scramble and create an attractive deal to offer the public.  The lending community realizes at this point there is little to motivate borrowers who are still in limbo trying to guess at the next decision of the Bank of England regarding the base rate.