A number of major lenders have cut rates below 4% on five-year fixed-rate mortgages, and competition among lenders is hotting up.
Following the Bank of England’s decision to reduce the base rate from 5.25% to 5% on 1 August, major lenders are reducing their mortgage interest rates, and the mortgage market has become increasingly competitive.
Barclays announced on 7 August that its 4.05% five-year fixed rate deal will decrease to 3.84%, with a spokesperson describing it as ‘good value for money’.
HSBC launched a sub-4% deal on 9 August, offering a rate of 3.95% on five-year fixed-rate mortgage deals. The rate is available to first-time buyers with a 40% deposit or home movers with a 60% deposit.
Nationwide and NatWest have also reduced rates and Coventry Building Society is now offering a sub-4% mortgage deal. Forbes magazine reports that rate cuts have been applied to over 100 mortgage products. Many mortgage deals are available now at under 5%.
In the two-year fixed-rate mortgage category, rates are hovering at around 4.2%, depending on the lender and the loan-to-value.
Encouraging signs for the property market
It’s important to understand that certain criteria are likely to apply to specific mortgage products. It’s also crucial to remember that mortgage deals can come and go very quickly, with some products only available for a very limited time. So, while we can’t guarantee that you would be able to secure a rate as low as some of the deals we’ve mentioned, it’s encouraging to see that rates are coming down. It clearly shows that the general reaction among lenders to the base rate cut has been positive. It’s also good to see lenders competing for business.
One spokesperson described the Bank of England’s decision as ‘welcome news borrowers had been waiting for’ and said that borrowers’ confidence in the market should increase in the coming months.
We will keep you informed of any further significant rate changes.