Mortgage Rates on the Move: HSBC and Barclays Cut Fixed-Rate Deals
The mortgage market is abuzz with activity as HSBC and Barclays have announced cuts to their fixed-rate mortgage deals. This move is expected to spark a renewed bout of rate competition among lenders, potentially leading to a “summer of savings” for homebuyers and those looking to remortgage.
Mortgage rates have been on a rollercoaster ride over the last two years.
The pricing of some deals has crept up in recent months, but improvements to money market swap rates, which largely determine the pricing of new fixed deals, appear to have prompted these two major lenders to reduce their rates. Other lenders are predicted to follow suit, which could lead to a broader market shift and truly spark the housing market.
HSBC’s cuts are across its range, with details of the new rates yet to be announced. Barclays, on the other hand, has reduced rates by more than 0.25 percentage points in some cases. For example, 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%. Another two-year fixed deal that was priced at 5.13% is now on sale at 4.88%.
“HSBC has initiated a ‘summer of savings’ for mortgage borrowers with its rate cuts, following Barclays’ lead. As other lenders join the trend, homeowners may finally see the relief they have been seeking, though a broader market shift is still needed to truly spark the housing market.” - Ranald Mitchell, director at broker firm Charwin Private Clients
The Bank of England held interest rates at 5.25% for the seventh consecutive time at its latest policy meeting, but described the decision as “finely balanced”. This has prompted some economists to say the Bank may be preparing the way for a first cut in interest rates at its next meeting in August.
Mortgage brokers are optimistic about the potential for rate reductions.
Andrew Montlake, the managing director of broker firm Coreco, believes that these cuts could fire “the starting pistol” on a renewed bout of rate competition among lenders. Nicholas Mendes, a mortgage technical manager at the broker John Charcol, agrees, saying that given the recent lender repricing, there is now potential for reductions.
As the mortgage market continues to evolve, one thing is certain - homebuyers and those looking to remortgage should be keeping a close eye on developments. With lenders competing for business, now may be the perfect time to secure a competitive mortgage deal.
Mortgage rates are on the move - stay informed to get the best deal.
