There are fresh signs that the mortgage market might be easing after two more lenders cut rates.
The move will put pressure on rivals to follow suit and make life easier for stretched borrowers.
Skipton and Barclays had already cut rates on a range of deals, though the best cuts were for those who already had plenty of equity in their homes.
On Thursday, HSBC, TSB and Aldermore followed suit.
HSBC lopped of up to 0.25 percentage points from its deal, to support “first-time buyers, home-movers and those seeking a buy-to-let mortgage”.
But mortgage experts warned borrowers to move quickly and note they are still paying more than they were before the Iran conflict.
Peter Stimson, director of mortgages at MPowered, said: “These lower interest rates are welcome, but it may be a case of ‘blink and you’ll miss them’. There’s every chance they will be short-lived, as lenders play catch-up with swap rates – the industry benchmark which determines how fixed rate mortgages are priced.”
Some of the HSBC offers include:
- First-time buyer: 5 Year 60 per cent LTV (£999 fee) at 4.89 per cent down by 0.14 per cent
- Purchase: 2 Year 60 per cent LTV (£999 fee) at 4.65 per cent down by 0.15 per cent
- Buy to Let Purchase: 2 Year 80 per cent LTV (£1,999 fee) at 5.57 per cent down by 0.22 per cent
- Buy to Let Remortgage: 2 Year 75 per cent LTV (£1,999 fee) at 4.83 per cent down by 0.11 per cent
Aldermore launched new 2 and 5-year fixed rates reduced by 0.20 per cent. There’s a new two-year fixed at 4.99 per cent for loans that are 75 per cent loan to value.
Aldermore has also slashed costs of buy to let deals, with a 5-year fix at 6.54 per cent.
From Friday 24 April, TSB will reduce some residential purchase and remortgage rates by up to 0.6 per cent and rates on selected Buy to Let products by up to 0.8 per cent.
Jon Cooper, director of mortgages at Aldermore, said: “We understand that every landlord’s situation is different, which is why we’re focused on giving brokers the flexibility and choice they need to find the right solution. Our latest rate reductions, alongside the reintroduction of discount products and a broader range of fee options, are designed to help brokers support their clients in a changing market.”
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Money markets have lately eased on hopes of a long-term truce in the Iran war. As the conflict began, mortgage rates rose sharply but have since come back somewhat.
Santander said that from Friday this week, it will reduce first-time buyer, home mover and remortgage fixed rates by up to 0.25 percentage points.
The reductions include Santander’s 98 per cent LTV, My First Mortgage product which is reducing by 0.25 percentage points to 5.60 per cent.
Figures from Moneyfacts show the average 2-year fixed residential mortgage rate today is 5.82 per cent. This is down from 5.83 per cent the previous working day. The average 5-year fixed residential mortgage rate today is 5.72 per cent. This is down from 5.73 per cent the previous working day. There are currently 6,707 residential mortgage products available. This is up from 6,701 the previous working day.
Mr Stimpson added: “Swap rates have been ticking down since the fragile peace process in the Gulf began, and this dip in swaps has allowed many major lenders to cut their prices this week. But in recent days, some lenders’ pricing has got out of step with swaps; since last Thursday the two-year swap rate has risen by nearly 0.25 per cent.
“With the Strait of Hormuz still shut and the economic shock of the war starting to be felt, continued volatility in financial markets is making mortgage pricing volatile too. Even with these latest cuts, borrowers choosing a fixed rate mortgage are still paying nearly 1.0 per cent more than they would have done just two months ago.”
Ken James, director at Contractor Mortgage Services, said: “On the surface, the momentum looks encouraging. But let’s not pretend the sector is breathing easy. If we blink at the wrong moment, the News at Ten could still deliver another setback. Markets remain hypersensitive, and confidence is still as fragile as the peace talks.”