Good news for home movers and first-time buyers. Major lenders have cut mortgage interest rates, with some fixed rates rates coming down below 5%.
Mortgage interest rates have gone down more substantially than we’ve seen recently. Santander, the Bank of Ireland and HSBC have made reductions, along with Nationwide and Virgin Money.
Santander recently launched a sub-5% five-year fixed-rate deal for residential purchases and has cut fixed-rate offers across its new business and product transfer mortgages.
Nationwide, Yorkshire Building Society and West One Loans have also offered sub-5% deals over the last several weeks.
One industry spokesperson said we are no longer seeing marginal cuts and that major rate reductions are now taking place.
Swap rates went down due to inflation coming down in August. The recent base rate review also had an impact. The Bank of England chose not to increase the rate, yet many economists had expected it to go up by 0.25%. Inflation slowed to 6.7% in August, down slightly from 6.8% in July. This was also an unexpected outcome.
While it’s impossible to say for sure what might happen, these reductions could mean that the property market may start to recover, and it’s certainly welcome news for the time being.
While the media has talked about a price war among lenders, we feel this is premature and exaggerated. While no one can say for sure what will happen, if we had to make a prediction, we would say that the market is unlikely to get any cheaper in the short term.
We will keep you posted on any significant rate changes in future.