It looks like things are heating up in the mortgage market, and it’s great news for anyone looking to buy a home or refinance! With mortgage rates dropping for yet another week, lenders from big banks to specialised institutions are eager to attract homebuyers and investors alike.
After a year of high borrowing costs that slowed things down in 2023, the market is starting to pick up pace. The recent Bank of England base rate cut has sparked even more competition among lenders, making it a good time to explore your options.
Earlier this month, the Bank of England cut interest rates from 5.25% to 5%, thanks to inflation easing back to more manageable levels this year. While July’s inflation ticked up slightly to 2.2%—just above the Bank’s 2% target—it’s still a far cry from the 11.1% peak we saw two years ago.
Economists are optimistic that we might see more rate cuts as the year goes on, which is music to the ears of anyone planning to take out a mortgage or refinance by the end of 2024.
For borrowers, whether you’re new to the market, looking for a buy to let or already own a home, this is fantastic news. The housing market is already seeing a boost, with more buyers jumping in and house prices starting to rise again. Sales volumes are up across much of the country, too.
According to the latest data from Moneyfactscompare, several UK lenders have been lowering their mortgage rates over the past week, and this trend has even influenced smaller, more specialised lenders. With so many products on the market right now, borrowers have a lot of choices.
Let’s take a closer look at the numbers:
- Lloyds Bank and Halifax both cut their fixed rates by up to 0.32%.
- TSB lowered rates by up to 0.25%.
- HSBC reduced rates by up to 0.24%.
- NatWest brought their rates down by up to 0.16%.
And it’s not just the big players:
- Nationwide trimmed its fixed rates by up to 0.26%.
- Skipton slashed rates by up to 0.40%.
- Leeds Building Society reduced rates by up to 0.35%.
- Other competitive cuts came from Furness Building Society (up to 0.35%), Cumberland Building Society (up to 0.20%), Yorkshire Building Society (up to 0.20%), Family Building Society (up to 0.30%), and Monmouthshire Building Society (up to 0.20%).
Smaller lenders like Kensington, MPowered Mortgages, and Gen H also joined in on the action, reducing their fixed mortgage rates throughout the week.
All these rate cuts paint a picture of not only cheaper borrowing but also a rejuvenated housing market, as improved affordability and growing confidence attract more buyers and investors.
“The rate-cutting trend continues, which is a positive sentiment for the mortgage market as lenders are working hard to entice borrowers.”
So, if you’ve been thinking about making a move, or financing an investment, now might be the perfect time to explore what opportunities out there!
Adapted from Buy Association.