loose change

Mortgage rates are edging down again, with widespread reductions in fixed rates and discount rates and a few variable rates. Bradford & Bingley is pioneering the fight-back by mutual building societies by cutting standard variable mortgage rates to a market-leading 7.24 per cent from 1 March and simultaneously raising savings rates to an average 0.5 per cent above equivalent rates from Halifax and Abbey National.

Alliance & Leicester has introduced new cheaper fixed-rate mortgages for one, two, three and five-year periods. The one-year rate is 1.95 per cent for up to 95 per cent of loan to value. Redemption fees of six months interest will be charged if the one, two and three-year mortgages are redeemed before February 2001, and the five-year before 2002.

Northern Rock is launching a new two-year fixed rate mortgage at 3.99 per cent, or 5.99 per cent fixed for three years, a 6.25 discount on the standard variable rate of 7.44 per cent for one year or a 3 per cent discount for two years, all with redemption penalties of 5 per cent during the first six years. A 6 per cent cash-back is available on a variable rate mortgage of 7.19 per cent with a 6 per cent penalty for redemption in the first six years.

First Mortgage is launching a new five-year fixed rate mortgage at 6.99 per cent for loans up to 75 per cent of valuation, available until 16 February. A booking fee of pounds 275 is charged and a six-month interest penalty is charged for redemption within the five years.

Britannia BS is offering first-time buyers a one-year discount of 2.75 per cent plus a 3 per cent cashback up to pounds 6,000, a refund of valuation fee up to pounds 400 and free unemployment protection insurance for a year. Britannia BS and Winterthur Life are offering a two-year fixed rate of 5.99 per cent for remortgages up to 95 per cent of valuation, with free valuation, no legal fees and a four-week completion period.

General Accident Life has extended the availability of its package of Flexi Mortgages, based on Newcastle BS products, which range from a 5 per cent cash-back and no discount to a 5 per cent discount and no cash- back.