More big lenders join major banks in dropping mortgage rates as competition returns to market
The UK’s biggest mortgage lender, Halifax, has announced it will be cutting rates
More mortgage lenders have announced cuts to their fixed rate deals in the latest signal that the market may be improving for borrowers.
Halifax, the UK’s biggest lender, announced it will be cutting fixed rates on various products as much as 0.71 percentage points.
This drop follows reductions from HSBC, TSB and Nationwide.
Other smaller lenders have also announced price reductions, with Principality Building Society announcing decreases on its two and five-year fixed products at 75 per cent loan-to-value – meaning 25 per cent equity or deposit – today, though it also announced an increase in rates for customers at 90 per cent loan-to-value.
And brokers have warned not to expect significant falls in the short-term.
Data from financial analytics company MoneyFacts showed average rates for two-year and five-year fixed mortgages had dropped by just 0.01 percentage points today since yesterday and 0.02 since last week.
The average two-year fix still sits at 6.83 per cent and the average five-year fix at 6.34 per cent.
Nick Mendes, mortgage technical manager at John Charcol brokers, said it would take a few months before the market would see any “substantial” decreases in fixed rate pricing.
“We should expect to see small reductions over the next few weeks before we see lenders starting to competing with one another again,” he said
Yesterday, mortgage brokers said that higher falls in rates could be seen if inflation data next week was positive.
David Hollingworth, of L&C Mortgages, said that if the figure announced next Wednesday (16 August) was lower than expected, this might lead to mortgage deals dropping further, on the expectation that the Bank of England‘s base rate may not be as high.
“While the pace of change isn’t rapid, we’re seeing a few rates tweaked and coming down. Usually, most reprices from lenders are going downwards at the moment, it’s rarer to see lenders repricing upwards”, he said.
Mortgage rates rose consistently from the end of May until the end of July, but have since stayed relatively steady.
Experts have said indications that the Bank of England’s interest rate may be close to or at its peak may be needed for significant falls to occur and lower-than-expected inflation data might trigger this, as the Bank generally ups rates in order to lower inflation.
Sourced by I News