Halifax is the latest lender to slash its prices, reducing first-time buyer and home mover fixed rates by up to 0.12% and remortgage fixed rates by up to 0.14% yesterday (Monday).
They were following hot on the heels of Barclays and NatWest which both made rate reductions on Friday. Coventry Building Society and Gen H have also cut prices in response to falling swap rates, which are what lenders used to set their fixed-rate mortgage pricing.
Overall, mortgage rates are falling with a typical two-year fixed rate plunging from 5.73% on Tuesday last week to 5.67% today, according to Moneyfacts.
Meanwhile, the average five-year fixed rate mortgage has dipped from 5.66% last week to 5.62% today.
Yet despite rates clearly moving in a downward direction, experts are warning borrowers thinking of waiting for more cuts that with so much volatility in the Middle East, anything could happen to rates.
Emma Jones, managing director at Runcorn-based Whenthebanksaysno.co.uk, speaking to the Newspage Agency yesterday, said: “Halifax announcing cuts on Friday and Gen H this morning gets June off to a good start but in the current turbulent economic environment lenders can price in the other direction very quickly.”
And David Stirling, independent financial adviser at Belfast-based Mint Wealth, told Newspage borrowers should not ‘mistake momentum for a trend’.
He continued: “Swap rates are still volatile, and what’s available on Monday may not be there by Friday.
“If you’re sitting on the fence waiting for rates to fall further, you could easily miss the window. If the numbers stack up for you today, then you should act. Lock it in, and then keep one eye on the market.”
‘Welcome news’ to those at the end of a fixed-rate deal
Despite these warnings, brokers have all welcomed the price cuts and say those taking advantage of these will see the benefits.
Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, said: “For those looking to remortgage, these rate reductions are another positive step and will be welcome news for borrowers approaching the end of a fixed deal.
“While market conditions can change quickly, recent weeks have seen a clear trend of lenders reviewing and reducing rates where possible.
“This makes getting expert mortgage advice more valuable than ever. With criteria, rates and product availability varying significantly between lenders, understanding the full range of options available can make a real difference to both affordability and long-term costs.”