Average mortgage rates appear to have reached a plateau, according to a financial information website, with several high street lenders making reductions this week.
HSBC UK is poised to make a wave of reductions on Friday, including for first-time buyers, home movers and people remortgaging.
Halifax Intermediaries has also signalled plans for product changes from Friday, with rate decreases of up to 0.35 percentage points on fixed-rate products, while BM Solutions will also make some reductions.
Amanda Bryden, head of Halifax Intermediaries and Scottish Widows Bank, said: “Swap rates, which play a significant role in the price of mortgages, continue to be volatile, but while they are falling, we are taking the opportunity to pass that on to home buyers.”
Santander also made some reductions on Thursday.
TSB said that from Friday, rates are decreasing on two-year fixed house purchase mortgages by up to 0.45 percentage points.
Moneyfacts”>
Some other TSB mortgage rates are increasing, including on product transfer deals and additional borrowing.
The average two-year fixed homeowner mortgage rate on the market on Thursday morning was 5.88%, down from 5.89% on Wednesday, website Moneyfacts said.
The average five-year fixed homeowner mortgage rate was 5.77%, unchanged from Wednesday.
At the start of March, the average two-year fixed-rate mortgage was 4.83% and the average five-year fixed-rate deal was 4.95%.
Moneyfacts said it had counted 6,665 homeowner mortgage products available on Thursday.
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
ADVERTISEMENT
Get a free fractional share worth up to £100.
Capital at risk.
Terms and conditions apply.
ADVERTISEMENT
Santander said it is passing on a reduction in borrowing costs after a fall in swap rates, which are used by lenders to price loans.
Adam French, head of consumer finance at Moneyfacts, said average mortgage rates have held steady since Easter, adding: “Rising mortgage rates seem to have plateaued for now.
“Product numbers have also been steadily improving; 809 deals have returned to the market since it hit a low of 5,856 available products on 24 March.
“However, this is still 973 (12.7%) fewer than before the conflict in Iran began.
“Money markets are now pricing for fewer base rate hikes than they were a few weeks ago and swap rates have fallen back towards 4% from highs of around 4.4%.
“This has given several lenders, such as Santander, Atom Bank and Skipton Building Society, the headroom to make a few meaningful cuts over the last few days.
“However, mortgage pricing is driven more by expectations than current rates and borrowers are still exposed to sudden shifts. Ongoing uncertainty in the Middle East and the looming threat of ‘Trumpflation’ mean the path to cheaper borrowing remains fragile.”
Nicholas Mendes, mortgage technical manager at John Charcol, said of HSBC’s plans to cut mortgage rates: “When a lender of that size starts repricing, it does tend to give the wider market a nudge and adds to the sense that this could help kick-start further reductions from other big names over the coming days.
“That is especially encouraging after the volatility of the last few weeks, where lenders were far more focused on protecting margins and managing risk than competing hard on price.
“It is also a broader move, covering areas including first-time buyer, home mover, remortgage and buy-to-let business, which makes it more meaningful than a small, isolated tweak to one corner of the range.
“For borrowers, the message is still not to sit back and wait for the perfect moment.
“Anyone buying, remortgaging or coming off a fixed rate in the next three to six months should be using this window to get prepared now.”