Lenders cut interest rates again as competition increases: Moneyfacts

The average two-year fixed interest rate is now 5.46%, down from 5.51% last week.

The typical five-year fixed rate is also currently 5.51%, down from 5.48% a week ago.

The mortgage type where the average interest rate was reduced the most was a two-year fixation at an LTV of 65%, with a reduction of 16 basis points to 5.72%.

Reductions of 15 basis points were made to the three-year interest rate fixation to 85% LTV, now at an average of 5.17%, and the five-year interest rate fixation to 65% LTV, now 5.21%.

The largest increase occurred to a five-year interest rate fixation to 100% LTV, with an average increase of 28 basis points to 6.05%.

Moneyfacts finance expert Rachel Springall said: “Fixed rate mortgage cuts took precedence this week, with 20 lenders making cuts, while others launched new deals or refreshed existing ranges. Building societies made some notable rate moves and competition was particularly strong at higher loan-to-value levels.

“Lenders have continued to reduce fixed mortgage rates in a healthy way in recent weeks, as the lower swap rate has passed through to the mortgage price.

“Another week of widespread rate cuts will undoubtedly be welcome, especially when it comes to deals available to those with small deposits.

“While improvements in global market sentiment have led to declining swap rates in recent weeks, borrowing costs remain highly sensitive to geopolitical tensions. Any renewed market volatility could quickly feed through to swap rates and slow the pace of further mortgage rate cuts in the coming weeks.”

Barclays made selected rate cuts of up to 66 basis points, while Halifax and Lloyds Bank cut rates by up to 15 basis points.

Nationwide Building Society reduced fixed rates by up to 19 basis points. Yorkshire Building Society also reduced selected fixed rates by up to 20 basis points.

Construction associations were very active all week. West Brom Building Society reduced selected fixed interest rates by up to 18 basis points, while Leeds Building Society reduced fixed interest rates by up to 21 basis points and launched new five-year products with 80% and 85% LTV.

Changes in fixed rates

• Agree Mortgages – Fixed rates reduced by maximum 30bps.
• AIB (NI) – Fixed rates reduced by maximum 19bpsalthough select 95% LTV products increased by up to 4bps.
• Afin bank – Fixed rates reduced by maximum 15bpsalthough some products did increase 10bps.
• Atomic bank – Fixed rates reduced by maximum 20bps.
• Bank of Ireland Intermediaries – Fixed rates reduced by maximum 40bps.
• Bank of Ireland, UK – Fixed rates reduced by maximum 40bps.
• Barclays – Fixed rates reduced by maximum 66bps.
• Coventry Building Society – Fixed rates increased by a maximum 7bps.
• Danske Bank – Selected fixed interest rates for large loans reduced by up to 16bps.
• Gen H – Selected fixed rates increased by 5bps.
• Halifax – Fixed rates reduced by maximum 15bps.
• Kensington – Fixed rates reduced by maximum 40bps.
• Leeds Building Society – Fixed rates reduced by maximum 21bps.
• Lloyd’s Bank – Fixed rates reduced by maximum 15bps.
• National Construction Association – Fixed rates reduced by maximum 19bps.
• Pepper Money – Fixed rates reduced by maximum 139bps.
• Principality Building Society – Fixed rates reduced by maximum 17bps.
• Scottish Building Association – Fixed rates reduced by maximum 35bps (excluding unaltered 95% LTV products).
• Skipton Building Society – Fixed rates increased by a maximum 14bps.
• United Trust Bank – Fixed rates reduced by maximum 100bps.
• Virgin money – Fixed rates reduced by maximum 16bps.
• West Brom Building Society – Fixed rates reduced by maximum 18bps.
• Yorkshire Building Society – Fixed rates reduced by maximum 20bps.

Tracker and discounted variable interest rate changes

• Afin bank – Tracker rates reduced by maximum 40bpsalthough some products did increase 41bps.
• Ecology building society – Discounted variable interest rate increased by 50bps.
• Hinckley & Rugby Building Society – Discount on variable rates increased by a maximum 25bps.
• National Construction Association – Tracker rates reduced by maximum 12bps.
• Skipton Building Society – Tracker rates increased by 11bps.
• United Trust Bank – Tracker rates reduced by maximum 100bps.
• Virgin money – Tracker rates reduced by maximum 15bps.
• Yorkshire Building Society – Tracker rates increased by 3bps.