Borrowers are now being urged to ‘close’ deals as three more major lenders have announced mortgage rate cuts.
Santander, Natwest and TSB have followed in the footsteps of Barclays and HSBC by cutting rates on a range of products ahead of the Budget.
From today, Santander is reducing prices on residential and buy-to-let mortgages for new and product transfer customers. It is also introducing new major loan products for refinancing customers.
For borrowers with larger deposits or equity, discounts of up to 0.36% are being implemented, but there are also discounts on some products for first-time buyers for 90% on loan-to-value deals.
Many of the products also come with £250 cashback.
David Hollingworth, Deputy Director at L&C Mortgagessaid this latest round of mortgage cuts may have been a response to inflation remaining stuck at 3.8% last week, rather than rising to 4% as expected. And this could mean good news for borrowers.
“There are early positive signs for mortgage rates as inflation has remained stable and below expectations in September,” he said.
“Hopes that inflation may have peaked at lower levels than expected have opened the door to a cut in the Bank of England’s key interest rate before the end of the year.
“As market forecasts have improved, swap rates have fallen further, which should give lenders the opportunity to improve their fixed interest rates.”
He said that while this could lead to more lenders cutting prices, the looming Budget has caused some anxiety among borrowers.
He advised: “There is still a good case for taking a rate now and keeping a close eye on market movements from now on. That provides certainty, but still allows for a jump to a lower rate before completion if we see further improvements.”
His views are shared by other mortgage brokers, who have welcomed these additional price cuts from Santander and the price cuts announced today from TSB and Natwest.
Justin Moy, director of EHF Mortgages from Chelmsfordspeaking to the Newspage agency, said: “Some significant changes to individual products across both lenders. The trend of shorter two-year deals becoming cheaper than the longer five-year options continues, but that doesn’t mean these are the best products as borrowers should seek advice from a qualified broker before proceeding with any change to the deal or application.”
“It’s likely to be a quiet few weeks as buyers wait for Budget news, but those with expiring mortgage deals can jump in now and grab a decent new rate.”