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Nationwide Announce Reduction In Mortgage Rates

In a rare move of hope in the property market it has been confirmed that Nationwide will be lowering the rate they charge for fixed and variable mortgages by just under 0.5%. While the move is a continuation of similar announcements by Abbey, Cheltenham and Gloucester and Woolwich the better rates will still only be available to those able to pay a deposit of at least 25% on a property purchase.

It would be wrong to suggest that this was not encouraging news for the property market, but the more recent changes have always been followed by conditions, often relating to the size of deposit the buyer can afford. The obvious reason is that the less the banks lend as a percentage of the value of a property the greater the cushion they have if the customer gets into serious financial difficulty. In affect the banks are just watching there own backs, but those buyers in a position to fulfil the criteria can make substantial savings in the short to medium term.

Hopefully we should see unconditional mortgage rate reductions in the coming weeks and months ahead, but as has been the way since the credit crunch started, nothing is certain at this moment in time.

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