Northern Rock and RBS cut loan prices

There was good news for mortgage holders today as bailed-out banks Northern Rock and Royal Bank of Scotland cut the prices of their mortgage offerings.

RBS is offering rates of 3.89% to borrowers taking out a 60% mortgage. This and other current similar deals are the first below 4% since October 2003.

RBS also has a two-year 75% mortgage fixed at 4.09%, and has cut the price of loans offered via its other lending brand, First Active. New customers at Northern Rock are being offered a two-year 75% mortgage fixed at between 4.59% and 5.19%.

The news follows a Government cash injection into the two banks. On Monday, RBS pledged to lend £6 billion to a wide range of customers when the Government increased its stake in the struggling bank to 68%. Today, it was revealed that the Government is considering injecting as much as £10 billion into Northern Rock so the Newcastle-based lender can boost new mortgage lending.