Mortgage rate cuts: these five major banks are cutting home loan costs

A further five mortgage lenders today announced cuts to home loan prices.

Barclays, HSBC, Halifax, Santander and NatWest are all making a number of rate cuts across various mortgage deals.

It marks the latest wave of mortgage rate cuts in an increasingly cheaper market for British borrowers.

Since the beginning of July, the mortgage with the lowest five-year fixed rate has fallen from 4.28 percent to 3.69 percent.

Meanwhile, the lowest two-year interest rate has fallen from 4.68 percent to 3.89 percent.

Barclays set the wheels in motion this morning when it announced a raft of cuts that will mainly benefit first-time buyers and home movers, including a number of deals of less than 4 percent for those with the largest deposits.

The lowest two-year fix for buyers with a deposit of 40 percent or more will drop to 3.99 percent from tomorrow.

For a mortgage of €200,000 that is repaid over 25 years, this amounts to €1,055 per month.

For buyers with a 15 percent deposit, Barclays is offering an interest rate of 4.46 percent, which unless it is beaten tomorrow will be a new best buy.

Barclays says it is also cutting rates on its springboard and mortgage guarantee products, aimed at first-time buyers struggling to make a deposit.

The Barclays Springboard mortgage requires family or friends to help with the deposit.

In this case, the helper provides a 10 percent deposit as security for five years and it is placed in a Helpful Start account that earns interest and is repaid after five years.

HSBC cuts interest rates

Shortly after Barclays, we received word that HSBC is implementing a new wave of mortgage rate cuts.

It says all its residential and buy-to-let deals will be reduced by up to 0.16 percentage points.

HSBC confirmed that two- and five-year mortgages for both home movers and first-time buyers will be reduced by up to 0.25 percentage points.

The lowest five-year solution for people who refinance with an equity of at least 40 percent is now 3.83 percent.

For those who need a mortgage to cover 70 or 75 per cent of their home’s market value, HSBC’s five-year products come with a £999 fee and are also priced below 4 per cent (3.99 per cent).

HSBC has also further reduced its higher loan-to-value margins for first-time buyers, offering 4.16 per cent to those locked in for five years with a 20 per cent deposit. The deal also offers £350 cashback.

Movers who buy with a 15 per cent deposit can now secure 4.16 per cent on a five-year deal with HSBC.

Landlords looking to remortgage investments they hold in their own name will also have reason to cheer.

Those taking out a five-year mortgage can remortgage with HSBC at a rate of 3.99 per cent with a product fee of £1,999, if they have at least 35 per cent equity in the property.

On a £200,000 interest-only mortgage, that would mean paying £664 a month.

Considering the average five-year fixed rate across the market is 5.25 per cent according to Moneyfacts, that could mean a monthly saving of £211.

Homeowners are happy: Halifax reduces the remortgage interest rate by up to 0.24 percentage points

Halifax is cutting rates

Halifax then followed suit by reducing mortgage rates on selected products by up to 0.11 percentage points for home movers and first-time buyers.

Homeowners looking to remortgage will benefit even more, with Halifax announcing reductions of up to 0.24 percentage points.

Mortgage interest rates will start tomorrow.

Nicholas Mendes, technical manager at mortgage broker John Charcol, said: ‘The latest round of rate cuts announced by Halifax comes as no surprise given the broader trend seen in the market in recent days.

‘With HSBC and Barclays leading the way with similar rate cuts, Halifax’s move appears to be part of an industry-wide recalibration in mortgage prices.

“Halifax’s rate reduction signals a targeted strategy to both attract new customers and retain existing customers.

‘Extending the delivery dates of all products also offers borrowers extra flexibility.

“The continued price revisions for various types of mortgage products reflect banks’ efforts to increase competitiveness.”

Santander and NatWest cut interest rates

Santander and NatWest also announced a wide range of range discounts for tomorrow.

From tomorrow, homebuyers and people taking out new mortgages will see Santander’s fixed interest rates fall by 0.29 percentage points.

It means that from tomorrow Santander will offer the lowest five-year solution on the market to homebuyers purchasing with the largest deposits.

All mortgage interest rates for new build purchases will also be reduced by up to 0.19 per cent, alongside all fixed interest rates for buy-to-let purchases, which will fall by up to 0.17 per cent.

Meanwhile, NatWest is also making some healthy cuts to fixed rate deals aimed at homebuyers, mortgage providers and landlords.

Mark Harris, CEO of mortgage broker SPF Private Clients, said: ‘A number of lenders are already reviewing rates – Coventry’s two- and five-year fixes, which top the best buy tables at 3.89 and 3.69 per cent respectively, are being withdrawn tonight . , while HSBC reprices down today and NatWest and Barclays reprice tomorrow.

‘Santander is also repricing tomorrow and is likely to lead the ‘best bargains’ with its new deals – a two-year purchase option at 3.84 per cent for those borrowing 60 per cent loan-to-value and a five-year fix at 3.68 per cent, also with an LTV of 60 percent.

‘This ongoing interest rate war between lenders is great news for borrowers as some very attractive deals are being launched, which will go some way towards improving affordability.’

Will mortgage interest rates go down?

The current mortgage rate cuts come after Bank of England Governor Andrew Bailey indicated the central bank could take a “more aggressive” approach to rate cuts if economic conditions allow.

The Bank of England chose last month to keep the base interest rate at 5 percent, after having already opted for a reduction at the beginning of August.

“Following the governor’s comments, which signaled possible lower long-term interest rates, markets are likely to adjust their forecasts,” Mendes said.

“If the Bank of England cuts the base rate to 4.75 percent or even 4.5 percent at the end of this year, it could have a significant impact on mortgage rates across the board.”

Mark Harris, CEO of mortgage broker SPF Private Clients, says a more aggressive approach to rate cuts will be welcomed by the markets.

“With the swaps coming out of the governor’s comments, this should lead to even lower mortgage prices,” Harris said.