Tanya Powley, On Friday October 28, 2011, 1:00 pm

Banks and building societies have made widespread changes to their mortgage rates in recent weeks, with a growing number of lenders raising rates on tracker loans as the escalating eurozone debt crisis drives up the cost of funding these mortgages.

This week, Nationwide Building Society and Halifax – part of Lloyds Banking Group – became the latest high-street lenders to increase their tracker rates. Halifax has upped the rates for tracker mortgages by as much as 0.30 percentage points, raising its two-year tracker from 3.04 per cent to 3.34 per cent. It is available for loans up to 75 per cent of a property’s value, with no fee.

Woolwich, Santander, Northern Rock, Accord and Barclays Wealth are among the other lenders to have raised their rates over the past month.

“What we’re seeing more of is high-street lenders withdrawing trackers and coming out with slightly more expensive rates, on average by around 0.2 percentage points,” said Ian Gray of Largemortgageloans.com.

But not all mortgage rates are heading upwards. At the same time as increasing several tracker rates, Nationwide Building Society cut the cost of some fixed-rate products – including its five-year fix, which was reduced from 3.69 per cent to 3.59 per cent.

Meanwhile, other lenders have eased their criteria and launched attractive products. On Wednesday, Barclays re-entered the 90 per cent loan-to-value market, after it stopped offering these loans three years ago. Coventry Building Society also launched a new range of fixed and capped rate products that come with no early redemption charges this week.

These are the current ‘best-buy’ mortgages deals available now.

Remortgages

While tracker rates have been going up, mortgage brokers say there are still a number of competitive deals available. Santander has a two-year tracker at 1.95 per cent – Bank of England (BoE) base rate plus 1.45 percentage points – available up to 60 per cent loan-to-value with a £1,995 fee. It come with a free valuation and free legal work.

For those who want a longer-term tracker, Gray said HSBC’s lifetime tracker at 2.49 – BoE base rate plus 1.99 per cent – is a “fabulous deal”. It comes with no fees and no early repayment charges, which means borrowers can remortgage to a fixed-rate deal at any point during the mortgage term.

Fixed-rate deals remain cheap and have not seen any major rate movements. Leeds Building Society is still offering its two-year fix at 1.99 per cent, available up to 75 per cent loan-to-value with a £1,999 fee. Chelsea Building Society’s five-year fix at 3.29 per cent, available up to 70 per cent loan-to-value with a £1,495 fee, is the market leading longer term fix.

First-time buyers: 90 per cent deals

Barclays’ move to increase its maximum loan-to-value from 85 per cent to 90 per cent has provided first-time buyers with more options. According to Moneyfacts, the financial data provider, there are now 253 mortgages requiring only a 10 per cent deposit, compared with 206 in October 2010 and just 101 in October 2009.

It is offering a three-year fix at 4.99 per cent with no fee or a five-year deal at 5.49 per cent, with a £499 fee. Its maximum loan size is £500,000.

However, there are some cheaper offerings. According to Ray Boulger of broker John Charcol, both Cambridge Building Society and Melton Mowbray Building Society offer five-year deals at 5.39 per cent.

Large loans

Competition has increased in the large-loan market recently, with more high-street lenders offering these type of mortgages.

RBS Private Banking has a two-year tracker at 2.19 per cent – BoE base rate plus 1.69 percentage points – available up to 50 per cent loan-to-value, with a £999 fee. NatWest has a two-year fixed-rate at 2.65 per cent, available up to 60 per cent loan-to-value, with a £999 fee.

However, Gray warns that only “super vanilla” borrowers will be able to access these rates. “Most wealthy borrowers will typically be better off opting for Barclays Wealth’s two-year tracker at 2.49 per cent.”

Self-employed

Skipton Building Society has some of the most competitive deals for self-employed borrowers as it will consider retained profits in a limited company. It offers a two-year tracker at 1.98 per cent – BoE base rate plus 1.48 percentage points – available up to 60 per cent loan-to-value, with a £1,995 fee. It also has a two-year fix at 2.48 per cent.