Mortgage Rates on the Move: A Summer of Savings Ahead?
The latest reductions in mortgage rates by HSBC and Barclays have sparked hopes of a renewed bout of rate competition among lenders. Analysts believe that these cuts could fire the starting pistol on a summer of savings for homebuyers and those looking to remortgage.
Mortgage rates are on the move
The reductions in rates by HSBC and Barclays are a welcome relief for mortgage borrowers, who have been facing rising costs in recent months. The average rate on a new fixed-rate deal lasting for two years is currently 5.96%, while the typical rate on a new five-year fix is 5.53%. However, with the latest cuts, borrowers can now expect to pay lower rates, with some deals available at below 5%.
The move by HSBC and Barclays is seen as a response to the recent improvements in money market swap rates, which largely determine the pricing of new fixed deals. The Bank of England’s decision to hold interest rates at 5.25% for the seventh consecutive time has also contributed to the reduction in mortgage rates.
HSBC cuts rates across its range
HSBC has announced cuts across its product transfers, deals for existing borrowers looking to increase their mortgage loans, new customers, remortgages, and buy-to-let investors. The majority of rate cuts are available up to 90% loan to value (LTV), with the exception of buy-to-let mortgages.
Barclays has also reduced rates on its fixed mortgage deals, with some rates now available at below 5%. The lender has announced a series of reductions that mean, for example, that a two-year fixed rate for those with a 10%-plus deposit or equity stake that was priced at 5.76% is now being offered at a rate of 5.48%.
Barclays cuts rates on its fixed mortgage deals
The reductions in mortgage rates are a welcome relief for first-time buyers, who have been facing rising costs in recent months. The average mortgage payment for a typical first-time buyer home has risen from £667 per month to £1,075 per month over the last five years, representing a massive increase of £408.
First-time buyer mortgage costs have risen sharply
The rise in mortgage costs has made it harder than ever for first-time buyers to own a home, especially without help from the bank of mum and dad or other family members. However, with the latest reductions in mortgage rates, there is hope that the cost of borrowing may finally start to ease.
Mortgage rates and house prices are closely linked
The relationship between mortgage rates and house prices is complex, but it is clear that when mortgage rates rise, house prices tend to fall. Conversely, when mortgage rates fall, house prices tend to rise. With the latest reductions in mortgage rates, there is hope that the housing market may finally start to pick up.
House prices have been rising steadily
The latest reductions in mortgage rates are a welcome relief for mortgage borrowers, and there is hope that the summer of savings may finally be here. With the Bank of England expected to cut interest rates later this year, there is a possibility that mortgage rates may fall even further.
Interest rates are expected to fall later this year
In conclusion, the latest reductions in mortgage rates by HSBC and Barclays are a welcome relief for mortgage borrowers. With the summer of savings ahead, there is hope that the cost of borrowing may finally start to ease, making it easier for first-time buyers to own a home.
