A new mortgage war has broken out. Vicky Shaw discusses how home owners and new buyers can make the most of it

A new mortgage war has erupted in recent weeks.

Nationwide Building Society, Santander, HSBC, Halifax, Yorkshire Building Society and Tesco Bank are among a wave of lenders to have revamped their ranges.

Some lenders are offering their lowest rates ever in the battle to offer appealing deals.

:: So what's behind the new mortgage price war?

David Hollingworth, a mortgage expert at L&C Mortgages, says: "Lenders are scrapping it out to attract business, whether it's from those buying their first home, moving house or looking to switch to a better deal.

"More lenders fighting for business means that they need to stand out from the crowd and truly differentiate themselves.

"This, coupled with some easing in cost of funds, is forcing lenders to offer rates that demand attention. As a result, lenders are squeezing whatever they can out of their deals and offering more and more eye-catching rates."

:: Will the mortgage price war continue?

Hollingworth says there's nothing to suggest an end in sight to the "very, very healthy" competition that's being seen on the market.

By offering great rates, smaller lenders are forcing bigger lenders to spruce up their ranges to maintain their market position, he adds.

:: Will rates get any lower?

Rachel Springall, a finance expert at Moneyfacts.co.uk, believes some rates could be shaved lower still by lenders if they need to meet specific targets to draw in new customers.

:: How can homeowners make the most of what's on offer and choose the right deal?

Springall says concentrating on the mortgage rate alone may not be the wisest way to navigate the mortgage maze.

"Interest rates are important but so is the incentive package and any fees that are chargeable," she says.

"Some of the lowest-rate deals carry the highest product fees and have little to no incentives, but other deals with slightly higher rates could be fee-free, with a free valuation, and offer free legal fees, which can be much more cost-effective.

"It's worth remembering that this is just the cost of the mortgage itself; if moving, there will be other costs to pay, such as removal costs."

Some borrowers may want to lock into fixed-rate mortgage deals to give themselves certainty while others may want more flexibility.

Low mortgage rates also give borrowers who can afford it the opportunity to make overpayments, and perhaps clear their mortgages earlier, Springall adds.

:: Bank of mum and dad continues to play a vital role

Despite the cheaper mortgage rates on offer, new research shows the bank of mum and dad continues to play a vital role in giving a helping hand on to the property ladder.

It is predicted the bank of mum and dad will be involved in 26% of all property transactions in the UK market this year.

According to research by Legal and General and the Centre for Economics and Business Research (Cebr), parents will lend more than £6.5 billion in 2017, providing deposits for more than 298,000 mortgages and helping to buy homes worth £75 billion.

COULD YOU BE SITTING ON A FORTUNE?

When was the last time you had a good spring clean? It could be well worth your while, if new research is anything to go by.

Three-quarters of people have found money down the back of their sofa while cleaning, with 42% finding more than £10 overall, according to sofa and carpet specialist ScS (www.scs.co.uk).

One in six have also found a lost bank card down the sofa - so it might be worth having one final rummage before phoning the bank to order some new plastic.

POUNDNOTES

Financial fact: Banknotes have evolved from receipts left with goldsmiths for safekeeping. Over time, people started exchanging receipts rather than the gold itself.

MILLENNIAL WOMEN MORE FINANCIALLY ANXIOUS

Women aged 18 to 35 feel more financially anxious than their male peers, a survey suggests.

Females in this group were less optimistic than men of the same age about their career advancement and ability to buy a home, the Pensions and Lifetime Savings Association found.

Women were also more likely to report increasing bills over the previous six months, the survey of more than 1,000 millennials in February found.

DIVORCE BRINGS INHERITANCE CONCERNS FOR PARENTS

More than three-quarters of over-55s want to have some control over how the next generation spends their inheritance, a survey has found.

Some 77% of people in this age group would like to influence how their legacy is spent, according to Prudential.

About a third (30%) do not want their wealth "squandered" by children, while one in four (26%) are concerned a spouse of their child could take a portion of their inheritance pot in the event of divorce.

CASH REWARDS FOR GOOD GRADES

Just over three-quarters (78%) of parents with children taking exams this year have promised a reward to encourage high grades.

Research from VoucherCodes.co.uk found parents are gearing up to spend an average of £205 in gifts.

Cash is the most common incentive offered by parents, the survey found.

HIGH FIVE SAVERS

Provider, Contact, Gross, Min Inv, Account, Notice/Term, Interest Paid, Access,

Paragon Bank, paragonbank.co.uk, 1.30%, £500, 120 Day Notice (6), 120 Day, Anniversary, O

National Counties BS, ncbs.co.uk, 1.26%, £500, 1st Issue Capital 120, 120 Day, Yearly, O

Hampshire Trust Bank, htb.co.uk, 1.25%, £1,000, 90 Day Notice (14), 90 Day, Anniversary, OP

Shawbrook Bank, shawbrook.co.uk, 1.25%, £1,000, 120 Day Notice Issue 39, 120 Day, Anniversary, OT

Charter Savings Bank, chartersavingsbank.co.uk, 1.10%, £1,000, 120 Day Notice Issue 10, 120 Day, Anniversary, O

Access notes: B = Branch, O = Online, P = Post, T = Telephone

Source: Moneyfacts, www.moneyfacts.co.uk. (01603) 476 204 (all rates subject to change without notice) 11.5.17

TOP FIVE MORTGAGE DEALS

Provider, Phone number, Rate, Fixed until, Max LTV, Min Fee, Incentive

Sainsbury's Bank, 0345 111 8010, 1.34% to 31.7.19, 80%, £995, Yes

Principality BS, 0845 045 0006, 1.55% to 30.6.19, 65%, Nil, Yes

HSBC, 0808 256 6876, 1.49% to 30.9.20, 75%, £999, Yes

Coventry BS, 0800 121 8899, 2.29% to 30.6.20, 90%, £999, Yes

West Brom BS, 0800 298 0008, 2.04% to 30.6.22, 75%, Nil, Yes

Source: Moneyfacts, www.moneyfacts.co.uk. (01603) 476 204 (all rates subject to change without notice) 11.5.17