"Competition amongst lenders is heating up for market share, and making positive moves in the low deposit arena is massively welcome."
Coventry Building Society and Accord Mortgages have both reduced rates across their mortgage ranges.
Accord Mortgages has announced rate cuts of up to 0.80% for residential clients with smaller deposits and for specific new build purchases, alongside a number of new cashback deals.
New deals, available from tomorrow, include selected 95% LTV rates reducing by up to 0.80% and new five-year products with £2,000 cashback for house purchases at 90% and 95% LTV.
Highlights include a fee-free five-year fixed rate at 6.23%, which comes with £2,000 cashback and a free standard valuation, available for both home movers and first-time buyers with an LTV between 85% and 90% LTV.
A two-year fixed rate at 95% LTV has reduced from 7.72% to 6.92% and comes with a £995 fee, £250 cashback and a free standard valuation.
A three-year fixed rate has lowered from 7.16% to 6.79% at 95% LTV with a £995 fee, £250 cashback and a free valuation.
Coventry's new range launches on Thursday 17th August with reduced residential new business rates between 65-80% LTV and lower five-year fixed rate buy-to-let deals at 65% LTV.
As part of the changes, the Society is withdrawing residential three-year rates at 90-95% LTV.
Newspage asked brokers for their views.
Stephen Perkins, managing director at Yellow Brick Mortgages, said: "Accord has heavily reduced its offering to those with low deposits, making the amount that such borrowers can obtain, and the monthly cost of the mortgage, much more beneficial. This is very welcome and encouraging news and will no doubt see other lenders look to counter, with the biggest winner being potential home-buyers and movers. Cashback will certainly help some buyers also with the property purchase costs, should that be a priority for the borrower. Hopefully, the forthcoming inflation data does not lead to these being pulled on the day of release over fears of a Bank of England reaction."
Ranald Mitchell, director at Charwin Private Clients, commented: "This is exactly the kind of lender innovation the broker community needs. Big rate reductions, high loan-to-value and generous cashback all help to unlock a section of mortgage seekers, home movers and first-time buyers that is badly underserved in the current market. Competition amongst lenders is heating up for market share, and making positive moves in the low deposit arena is massively welcome. It makes a change from the usual lenders fighting for the safe end of the market."
Lewis Shaw, owner and mortgage expert at Shaw Financial Services, said: "It's great to see Coventry reducing rates. As the UK's second-largest building society, this will put more pressure on middle-table mortgage lenders to get in on the action while they can. However, the worry is that all recent rate reductions could be unwound if Wednesday's inflation data disappoints. It's now all eyes on Big Wednesday to see what's in store for us and tomorrow could be the turning point for better or for worse."
Justin Moy, managing director at EHF Mortgages, added: "Coventry BS has taken a slightly different view to other lenders that repriced on Monday, concentrating their rate reductions on the mid-range of products that will appeal to the majority of its target market. With a reduction so close to the key inflation data this week, it suggests that we may have some stability in products for a while, but as we know the wind can change direction very quickly. But when you have mortgage lenders moving in different directions, this highlights the importance of using a mortgage broker to advise you on your best options."
