Some banks try and attract more custom

A recent report has shown how some banks are trying to attract new custom by cutting the interest rates on some mortgage products.

A number of banks have used this tactic recently in a bid to try and secure a greater share of the mortgage market and take advantage of the huge gap that has been left as a result of lenders tightening their lending criteria and taking deals off the shelves.

An official from one bank, the Abbey, recently stated: “We will continue to offer competitive products whilst still being careful to balance this against the need to maintain service levels for our customers given recent competitor moves.”

The Royal Bank of Scotland also recently reduced some of its mortgage rates in order to improve business, and one official from the bank said: “Whilst 2008 has seen a shrinking mortgage market, we have actually increased the amount we have lent by 18 percent and plan to continue this trend for the rest of the year.”

In the meantime, many consumers are still struggling to get an affordable mortgage deal, as lenders continue to exercise increased caution when it comes to lending and taking on new business.