Photo by Mortgage borrowers are set to benefit from a competitive market, with several major lenders reducing their mortgage rates in recent days. The move is expected to bring some relief to borrowers who have been struggling with affordability after successive rate rises.
According to UK Finance, around 1.6 million mortgages are coming off fixed rates this year, and many of these borrowers will be looking to remortgage to a better deal. The good news is that lenders are now competing fiercely for their business, with the likes of Barclays, HSBC UK, Santander, Halifax, and NatWest all reducing their mortgage rates.
Mortgage rates are falling
Barclays, for example, has announced rate reductions on a selection of products from Friday, including in its residential and buy-to-let ranges. HSBC UK is also planning to reduce rates on some of its mortgage products from Friday, with further details to be announced on the day.
Santander has reduced selected fixed rates for home buyers by up to 0.16 percentage points, while Yorkshire Building Society has cut its mortgage interest rates by up to 0.20 percentage points. Halifax has also cut rates on a range of home buyer fixed-rate mortgages by up to 0.19 percentage points.
Mortgage applications are on the rise
The move is seen as a positive development for borrowers, many of whom are struggling with affordability after successive rate rises and then holds. Expectations of a rate reduction in August are high, and lenders are keen to generate more business as they ramp up their summer sales.
“With the big five lenders - Barclays, HSBC, Santander, Halifax, and NatWest - reducing their mortgage rates this week, lenders continue to jostle for business as they ramp up the summer sales,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.
“Those lenders who haven’t 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.”
House sales are on the rise
The news comes as the housing market is showing signs of picking up, with HM Revenue and Customs figures recently showing the number of UK house sales increasing for the fifth month in a row in May.
It’s good news for borrowers, and with lenders competing fiercely for their business, now could be a good time to consider remortgaging to a better deal.
