Lloyds TSB and its mortgage arm Cheltenham & Gloucester have announced cuts of up to 0.38 per cent in their mortgage range on two-year fixed rate and tracker deals.

The highest reduction of 0.38 per cent applies to their full-term tracker deal, which is offered at the base rate plus 0.95 per cent at a current rate of 5.95 per cent for people who are able to put down a 20 per cent deposit.

Other reductions will cut the interest rate of a two-year fixed rate mortgage for people with a 10 per cent minimum deposit to 6.69 per cent, and the two-year tracker, for which a minimum 25 per cent deposit is required, to 5.89 per cent.

The mortgage providers have also launched a new product range for people borrowing between £50,000 and £250,000, which offers borrowers with a 25 per cent deposit a two-year fixed rate loan of 5.99 per cent.

The mortgage arm of Barclays, The Woolwich, has cut interest rates on its buy-to-let mortgages by up to 0.5 per cent, while Halifax and Premier Mortgage Services have launched a mortgage which is available for purchase, remortgage and first-time buyers at 6.34 per cent fixed until September 2010 with deposits of over 20 per cent.

Karen Bowman, national account manager for Halifax, commented: “Two-year fixed rates continue to be popular with consumers so alongside our recent rate decreases this product should prove extremely popular with borrowers.”

Following a recent fall in swap rates, major mortgage lenders such as Abbey, Halifax and Nationwide have started to reduce the interest they charge on their mortgage deals, spurring speculation that the worst hikes caused by the credit crunch were over.

However, for buyers without a large deposit there is little hope of securing a mortgage as providers currently show no intention to loosen their lending criteria and apply ever-increasing arrangement fees to their products – they have little choice but to sit and wait until further signs of a recovery in mortgage lending arise.

© Fair Investment Company Ltd