Three major mortgage lenders—Halifax, HSBC, and Clydesdale Bank—have reduced rates on their mortgage deals, sparking speculation that the Bank of England (BoE) will lower interest rates in its upcoming decision. The market anticipates a 0.25 percentage point cut, bringing the base rate down to 4.5%.
Halifax Leads the Way in Rate Reductions
Halifax has introduced reductions of up to 0.3 percentage points for remortgage deals, while home movers and first-time buyers will see cuts of up to 0.11 percentage points. The lender now offers one of the most competitive five-year fixed rates for borrowers with at least 40% equity in their property. Its 4.18% five-year fix, coupled with a £999 fee, translates to monthly repayments of approximately £1,076 on a £200,000.
For those borrowing up to 75% of their home’s value, Halifax now offers a 4.36% five-year fixed rate with the same £999 fee.
Other Lenders Follow Suit
Clydesdale Bank has also reduced rates across its two-year and five-year fixed deals, with cuts of up to 0.28 percentage points. Meanwhile, HSBC has announced impending rate changes across its residential and buy-to-let products, though the specifics will only be disclosed tomorrow.
These rate cuts follow similar moves by Barclays and Coventry Building Society earlier in the week. The rapid succession of reductions suggests that lenders are positioning themselves ahead of a potential BoE rate cut.
Market Trends and Swap Rates Signal Further Reductions
Jack Tutton, director at SJ Mortgages, noted that the downward trend in rates aligns with recent declines in Sonia swaps, the interbank lending rates that influence pricing. Over the past few weeks, five-year swap rates have fallen from 4.17% to 3.91%, while two-year swaps have dropped from 4.29% to 4.05%.
Andrew Montlake, managing director at mortgage broker Coreco, stated, “Where Halifax goes, other lenders tend to follow, so these cuts could trigger a chain reaction. Markets have already factored in a rate cut for Thursday.”
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What This Means for Homeowners and Buyers
With mortgage rates declining, homeowners considering a remortgage or new buyers entering the market could benefit from locking in lower rates. However, experts suggest monitoring the market closely, as further cuts could emerge if the BoE confirms a rate reduction.
For those seeking the best mortgage deal, it remains crucial to compare offers and seek professional mortgage advice. With financial conditions evolving, securing the right rate could result in substantial long-term savings.
