NatWest, Halifax and Virgin Money are all cutting mortgage rates

Three other major mortgage lenders have announced that they will lower their rates.

NatWest, Halifax and Virgin Money will all make cuts from August 2.

Most notably, those who buy or re-mortgage from NatWest have seen two-year and five-year mortgage rates fall by up to 30 percentage points on certain products.

Discounts are applied to mortgages for both new and existing customers.

Currently, NatWest’s cheapest five-year fixed rate costs 5.84 percent. This is available to those who re-mortgage with at least 40 percent equity in their home.

NatWest hasn’t said exactly what mortgage rates will be cut, but after tomorrow’s change, it’s likely to drop to 5.64 percent or 5.54 percent.

Virgin Money has also announced that it is cutting the cost of some of its deals offered through mortgage brokers by up to 0.41 percentage point.

Meanwhile, Halifax cuts rates on its five-year fixed-rate remortgage products by 0.18 percentage points.

It follows a series of rate cuts announced by rival lenders last week.

First, HSBC cut rates for new customers and customers re-mortgaging, with deposits or equity of at least 10 percent. This was quickly followed by Barclays, Nationwide and TSB.

Coventry Building Society also cut its mortgage rates, cutting all of its two- and five-year fixed new home loan rates. Other lenders following suit included Accord Mortgages, MPowered and Platform, part of the Co-operative Bank.

Despite the recent spate of lender activity, average mortgage rates have held steady over the past week, according to data from Moneyfacts.

Since the start of last week, the average two-year fixed-rate mortgage has fallen from 6.83 percent to 6.81 percent, while the five-year average fixed-rate has remained unchanged at 6.34 percent.

Despite lenders cutting rates, average fixed rates in the market have remained stable

However, there are many who believe that more lenders will cut interest rates in the coming weeks.

This is mainly because CPI inflation fell more than expected last month, changing market expectations around interest rates.

Forecasts for the peak of the Bank of England’s key interest rate have now fallen from 6.5% to less than 6%, with some now predicting that key interest rates could peak at 5.5%.

Swap rates, which banks and building societies use to price their fixed mortgages, have also fallen.

Nicholas Mendes, mortgage technical manager at broker John Charcol, says: ‘In another victory for mortgage holders, NatWest is the latest major lender to lower their fixed rates.

HSBC made cuts last week, swap rates have remained stable and lower in recent weeks compared to the volatility of a few months ago and the current repricing of fixed rates shows there is enough movement for lenders to reprice downwards.

“Usually, lenders would be reluctant to make interest rate changes before a base rate decision is so imminent that markets have gained confidence in recent weeks, which hopefully seems to finally be rubbing off on lenders.”

While NatWest is lowering rates on its residential products, it’s raising rates on its buy-to-let deals.

Those using NatWest to buy a buy-to-let will see a rate increase of up to 10bps on select five-year deals, while buy-to-let remortgage rates will increase by up to 30bps and 25bps on select two- and five-year deals .