First Direct reduces mortgage rates

First Direct is cutting interest rates on two mortgage products by up to 0.20 per cent.

With effect from tomorrow First Direct will cut the cost of its two-year fixed-rate deal to 5.59 per cent (6.3 per cent APR). The offer comes with a £499 booking fee and £999 arrangement fee.

The previous pricing of the deal was 5.76 per cent, with a £499 booking fee and £1,499 arrangement fee.

There is also a low fee version on offer from the lender – which is part of the HSBC group.

First Direct is now offering a two-year fixed-rate mortgage at 5.89 per cent (6.2 per cent APR); along with a £99 booking fee and £399 arrangement fee.

Again this has previously been priced at 5.99 per cent, with a £99 booking fee and £399 arrangement fee.

The pricing of the bank's five and ten year fixed rate mortgages is unchanged. The new deals will be on offer from Friday 30th May.

Chris Pilling, First Direct's chief executive, said: "We regularly review our fixed-rate mortgage offers to make sure they're competitive.

"Today, we're reducing the cost of our popular two year fixed rates, which is likely to give them a prominent place in the best buy tables."

First Direct returned to mortgage lending to new customers on May 19th after a seven week hiatus.