Two of Britain’s biggest mortgage lenders both cut the cost of their fixed rate deals today in a hopeful sign for borrowers and first time buyers.
HSBC said that from tomorrow it will be cutting rates across its full range of products although it did not say by how much.
Meanwhile Barclays is also cutting rates on many of its deals. The rate o]n a five year fixed mortgage for purchase will fall from 4.47% to 4.34% while the rate for a five year loan for remortgaging falls from from 4.77% to 4.32%.
The swap rates that effectively set the pricing for fixed deals have been slowly declining in recent weeks on rising hopes that the Bank of England will start to cut borrowing costs as early as June - or August at the latest - as inflation falls.
Aaron Strutt of advisers Trinity Financial said: “It wouldn’t be unreasonable to expect fixed rates to come down over the next six months and be somewhere close to the levels they were in January. Five-year fixes need to be around 4% for people to feel like they are getting reasonable value for money.”
Stephen Perkins managing director at Yellow Brick Mortgages, said: Excellent news this morning with rate reductions from both Barclays and HSBC, which will reinvigorate a mortgage market that has been languishing for too long. This could be the spark that starts another mini-rate war as increasingly dovish mood music emerges from Threadneedle Street.
Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management said: “Finally, some good news for Britain’s beleaguered borrowers. I’m praying other big lenders will follow suit. Barclays’ rates aren’t competitive currently so this will put them in a more favourable position when speaking with borrowers.”
