Two of the ‘big six’ lenders today announced mortgage rate cuts, a move that will benefit anyone about to buy a home or remortgage.
Barclays will cut interest rates on a number of products tomorrow (Friday, October 24), including mortgages with lower deposits.
There is now an interest rate of 4.82% available on the five-year 95% fixed rate loan (LTV) for those with a 5% deposit. This is supplied without product costs.
The lowest rate is now 3.86% for homebuyers with a 40% down payment. This two-year fixed rate mortgage comes with a fee of £899.
Meanwhile, it emerged that HSBC would also cut rates. Although details have not yet been announced, agency Newspage reported that the lender “extensively reduced interest rates on its housing products with each loan-to-value (LTV).”
The interest rate cuts follow the news that inflation had remained at 3.8% in September. Experts believe that the fact that inflation has not risen to the expected 4% may have had a positive effect on the markets.
Jack Tutton, director of Fareham-based SJ Mortgagestold Newspage that the economic outlook for Britain was looking slightly better and that was filtering through to interest rates.
He added: “Finally some positive news for mortgage holders after much doom and gloom with rising mortgage rates.
“The financial markets have improved significantly in recent weeks. These improvements have enabled both HSBC and Barclays to make these positive changes in the hope that the rest of the market will follow suit.
“With the Budget just around the corner, it will be interesting to see how brave lenders are with any changes they make to their products before the Chancellor makes her statement.”
Anyone wishing to take out a mortgage is advised to do so before the November 26 Budget.
Justin Moy, director of EHF Mortgages from Chelmsfordtold Newspage: “Closing a new deal before the budget is certainly an increasingly popular story among those with expiring deals.”