Coventry Building Society and HSBC have followed in the footsteps of Barclays and cut mortgage rates this week.
Mortgage prices have risen steadily in recent months and the Bank of England’s base rate has not changed for months.
But SWAP rates, which have a major impact on lenders’ price levels, have improved recently and this is now being passed on to consumers.
We reported this earlier this week Barclays had cut interest rates on some of its mortgages for homebuyers.
Yesterday, HSBC announced that it will reduce interest rates on fixed-rate mortgages for first-time buyers, movers, refinancing mortgage providers and product changers. These changes come into effect today (Wednesday 26 June).
Today it was Coventry Building Society’s turn to unveil new price cuts. These include changes to fixed rates for new and existing borrowers.
Emma Jones, director of Whenthebanksaysno.co.uk, said via the Newspage agency: “They are now falling like dominoes. Every day this week, major lenders have announced rate cuts, which is a win for borrowers. Last night’s game against England may have been flat, but the mortgage market is full of positive energy and momentum.
“Things are suddenly looking a lot brighter for the real estate market as we enter the second half of the year. The number of inquiries has increased significantly this week, suggesting that the improved weather may also have improved mood and confidence.”
Mortgage Price Outlook: Are More Rate Cuts Coming?
With three major lenders calling for cuts to their fixed interest rates, it seems likely that more will do the same.
Borrowers who need to remortgage or are about to purchase a home may see better rates and possibly better terms as lender confidence increases.
August is also the date that markets have identified as the most likely time for the Bank of England to make cuts interest rates.
Bob Singh, founder of Chess Mortgages, also told Newspage: “The mortgage market has been revived by lenders who are now firmly anticipating the possibility of two rate cuts by the end of the year.
“The Federal Reserve [the US central bank] is also pricing in similar cuts. Coventry joined the bandwagon with HSBC and Barclays earlier this week and more are set to follow.
“This will be encouraging news for those looking to take out a mortgage in the short term or extend their super-low interest rates this year and next. Inflation figures will be crucial for a sustainable rate cut, but let’s keep an eye on July 5, when the election results will be announced. No bets please.”