The sentiment in the mortgage market was positive this week, with a larger portion of lenders reviewing their rates than the week prior.
And as Moneyfactscompare.co.uk finance expert Rachel Springall points out, despite some high street banks pushing out newly priced ranges, the margin of cuts differed, with some more generous than others.
In addition, there were still a couple of lenders increasing fixed rates slightly, but these were outweighed by cuts elsewhere. As a result, the average two- and five-year fixed rates fell to 4.95% and 5.01%, respectively week-on-week. The Moneyfacts Average Mortgage Rate fell to 5.00%.
There were a few prominent brands to make fixed rate tweaks, NatWest and RBS moved to reduce selected fixed rates by up to 0.21%, TSB cut by up to 0.20%, HSBC cut by up to 0.07%, Lloyds Bank, and Halifax, cut by up to 0.13% but also increased selected deals by 0.10%, Barclays cut by up to 0.13%, but they also increased some deals for remortgage borrowers by 0.10%. In addition, Santander launched new ‘large loan’ fixed deals.
Out of the few building societies to make fixed rate moves this week, Yorkshire Building Society cut by up to 0.23%, Skipton Building Society cut by up to 0.16%, Leeds Building Society cut by up to 0.11%, Principality Building Society cut by up to 0.10%, Leek Building Society cut by up to 0.06%.
Cumberland Building Society cut by up to 0.40% for deals at 90% and 95% loan-to-value. Nottingham Building Society cut its ‘RIO’ fixed range by up to 0.16%. In contrast, Newbury Building Society increased by up to 0.10%. In addition, Newcastle Building Society withdrew a selection of ‘enhanced plus’ deals.
Not to go unnoticed, Accord cut by up to 0.23%. The Co-operative Bank for Intermediaries launched new fixed deals, include some ‘green’ mortgages and Kensington launched new ‘special select’ fixed deals. In contrast, MPowered Mortgages pulled their range from the market, and Virgin Money pulled some of its intermediary exclusive range.
Springall said: “One attractive deal to hold its chart worthy position this week is the two-year fixed rate mortgage from First direct, priced at 3.90% and available at 60% loan-to-value for remortgage customers. It includes a free valuation, free legal fees, and charges a reasonable product fee of £490. The deal is a great choice for those looking to limit the upfront cost when changing their mortgage.”
She added: “Activity has picked up in the mortgage market this week, with the biggest high street banks making rate tweaks. Swap rates continue to hover around their 30-day lows, which in turn, can ignite further rate reductions. However, the margins of cuts are what matters the most to borrowers, as a ‘rate war’ is more in keeping with the gravitas of the cuts made, not just that big banks are reviewing their ranges.
“That in mind, there are only a few days left until the next base rate decision, and the sentiment for another cut feels mixed. If the rate does hold, borrowers will have to wait until December, and even then, if the timing is not quite right, it won’t be until February at the earliest.”
