(Alliance News) Britain’s top banks are lowering mortgage rates as competition for borrowers heats up throughout the summer.
Halifax, HSBC UK, Barclays PLC, Santander, and NatWest Group PLC are among the banks that have updated their product offerings this week.
It may provide some respite to borrowers looking for a better deal, but in today’s high interest rate environment, many customers trying to re-mortgage may still discover rates much higher than those they have previously paid.
According to UK Finance, 1.6 million mortgages will be converted from fixed to variable rates this year.
Barclays has announced that it will lower rates on a number of products beginning Friday, including its residential and buy-to-let portfolios.
HSBC UK also intends to cut several rates in its mortgage product lines beginning Friday, and will provide more information on the day.
Existing clients wishing to switch or borrow more, as well as first-time buyers and home movers, may benefit from HSBC’s lower rates.
On Thursday, Santander decreased certain fixed rates for property purchasers by up to 0.16 percentage points.
Yorkshire Building Society also announced on Thursday that its mortgage interest rates have been cut by up to 0.20 percentage points “with immediate effect”.
Its deals include a five-year fixed rate of 4.84% (formerly 4.99%) for re-mortgaging purposes at up to 80% loan-to-value (LTV) with a GBP1,495 fee, free appraisal, and free re-mortgage legal services.
Ben Merritt, Yorkshire’s director of mortgages, stated that market conditions had allowed the company to lower rates on a number of products across its portfolio.
He clarified: “We will continue monitoring developments closely over the coming weeks, in order to ensure our mortgages remain as competitive as possible.”
Halifax, the lending behemoth, reduced rates on a variety of fixed-rate mortgages for property buyers by up to 0.19 percentage points on Wednesday. This comes after last week’s rate reduction for its remortgage products.
Halifax’s revised offering now includes a five-year fixed-rate mortgage at 4.26%, down from 4.45%, for those with a 40% deposit. The package includes a GBP999 charge.
On Tuesday, NatWest reduced rates on both its “new business” and current client mortgage ranges.
Moneyfacts, a financial information website, reports that the current average two-year fixed-rate homeowner mortgage rate is 5.93%. This is a decrease from the average rate of 5.94% on Wednesday.
The average five-year fixed home mortgage interest rate is 5.51%. This remains unaltered from the prior working day.
Moneyfacts recorded 6,739 homeowner mortgage products on the market, up from 6,736 on Wednesday.
The Bank of England’s base rate has been held at 5.25%, but with Consumer Prices Index (CPI) inflation lately reaching its 2% objective, a base rate drop is expected.
There have also been hints that the housing market is improving. HM Revenue & Customs (HMRC) records recently revealed that the number of UK property sales grew for the fifth consecutive month in May.
Mark Harris, CEO of mortgage broker SPF Private Clients, stated: “With the big five lenders – Barclays, HSBC, Santander, Halifax, and NatWest – lowering their mortgage rates this week, lenders continue to compete for business as they ramp up summer sales.”
“Lenders who have not yet repriced are likely to follow suit, as long as service levels allow. Even though swap rates, which underpin the pricing of fixed-rate mortgages, are not showing a consistent downwards trend, the need to generate more business seems to be motivating lenders to tweak their rates. It’s good news for borrowers, many of whom are struggling with affordability after successive rate rises and then holds. Expectations of a rate reduction in
