This Tuesday, the Yorkshire group of building societies the Yorkshire Building Society, Chelsea Building Society and Barnsley Building Society announced that the rates on some of their tracker mortgages were increasing by 10-20 basis points, followed by news that Northern Rock was also increasing the costs of many of its fixed-rate mortgage deals. However, the Co-op Bank announced yesterday that it will be reducing the costs of its five-year fixed-rate mortgages by up to 90 basis points. Basis points are equivalent to 1/100th of 1 per cent, and are used to calculate changes in interest rates on mortgage deals. The reductions by Co-op translate into a new 3.39 per cent fixed rate for five years for mortgages worth 75 per cent of a propertys value, although these deals also come with a £999 fee. Nevertheless it is the equal of the best value deals on the market such as the 3.39 per cent five-year fixed rate mortgage with a £995 fee from the Yorkshire Building Society and gives potential mortgage-holders with a 25 per cent deposit far more choice. It becomes an even better deal for anyone seeking to remortgage their property as the package comes with free legal costs and a free property valuation. Anyone with a Co-op current account will be able to access the competitive interest rate without the fee, as part of a standard “loyalty” incentive.
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