Mortgage bank Alliance & Leicester is cutting the rates on some of its home loans from today, August 27.
The lender said the rate on two-year fixed loans of up to £250,000 will fall to 6.19 percent from 6.64 percent.
The rate for two-year loans of between £250,000 and £1 million will drop to 5.99 percent from 6.14 percent and A&L is also cutting the rate on three-year loans of up to £1 million to 6.89 percent from 7.09 percent.
Tough times
Despite efforts such as these, mortgage costs remain historically high, having risen sharply in the past year as banks stung by the credit crunch seek to conserve capital and protect profits.
This has had a negative affect on total UK mortgage approvals, which fell to 22,448 in July, a decrease of 65 percent compared with the same period last year, according to figures published by the British Bankers' Association.
Last month Alliance & Leicester accepted a cash and shares offer worth £1.3 billion from Spain’s Banco Santander.