4 top lenders follow HSBC’s lead and reduce mortgage rates
Great news for homeowners as half of the country’s top 10 biggest lenders have decided to lower mortgage rates, marking a significant turning point in the market. This comes after months of rising rates triggered by inflation concerns earlier in the year, causing two and five-year fixed-rate home loans to increase substantially.
Barclays, Nationwide, and TSB have all made announcements about reducing rates on their fixed-term mortgages, following HSBC and Coventry’s earlier decisions in the week. While the rate cuts may be relatively modest, mortgage brokers see this as a pivotal moment in the industry.
Nationwide, the third largest lender in the country has lowered its fixed-rate deals by up to 0.35 percentage points and its trackers by 0.2 percentage points. For example, its two-year fixed rate with no fee has dropped from 6.34 per cent to 5.99 per cent, and its five-year fix with a £999 fee is now 5.24 per cent, down from 5.49 per cent.
HSBC and Barclays have also followed suit, with HSBC reducing its two-year fixed rate loan from 6.24 per cent to 6.14 per cent, and Barclays cutting the rate on its own two-year fix from 6.28 per cent to 6.13 per cent, available for those with a 40 per cent deposit. TSB has joined the trend by cutting its two-year fixed mortgage rate from 6.39 per cent to 6.04 per cent.
This positive news for homeowners comes alongside improved predictions for the Bank of England’s upcoming decision on the official interest rate. Previously, there were concerns about a 0.5-point increase, but now it is expected to be a more modest 0.25-point increase due to positive inflation data.
Financial experts are optimistic about the future of mortgage rates, provided inflation continues to move in the right direction. Smaller lenders have also joined the rate reduction trend, with Platform, Nottingham, and Skipton building societies all lowering their rates between 0.35 and 0.15 percentage points.
While borrowers may be wondering if they should wait to lock in a rate, experts advise acting promptly and securing a rate now, given the uncertainty of future economic developments. So, it’s advisable for those looking to apply for a mortgage to secure a favourable rate early.
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