Mortgage price cuts have continued this week, with TSB, HSBC and Barclays further cutting their interest rates.
Effective today, TSB has implemented discounts of up to 0.25% on its fixed interest rates for homeowners and first-time buyers.
Meanwhile, HSBC has cut home and residential rates buy-to-let mortgages and Barclays has also reduced fixed rate prices.
These aren’t the only lenders making price cuts; Skipton Building Society and MPowered also announced this morning that they will be cutting interest rates.
Some of these price reductions are on mortgages with a high loan-to-value – these are loans for a larger proportion of a property’s value. It means that borrowers with smaller amounts of equity now also benefit from interest rate cuts.
Justin Moy, managing director of EHF Mortgage, said via the Newspage agency: “Borrowers with higher loan-to-value will be happy to see their interest rates improve. Barclays’ interesting move to significantly reduce the follow-on rate by 1.5% today should not be missed.
“This could support better affordability figures in the short term and reduce payments for those stuck on this lender’s equivalent [Standard Variable Rate] SVR.”
Why it is important to keep an eye on mortgage interest rates
These reductions come after the The Bank of England has lowered the base interest rate by 0.25% from 5.25% to 5% and will come as a welcome relief to borrowers who have seen mortgage rates rise relentlessly over the past two years.
And for anyone who is about to take out a mortgage, the advice is to keep a close eye on the mortgage interest rate, even if your mortgage is pending.
Hannah Bashford, director of Model Financial Solutions, said via the Newspage Agency: “If this isn’t a positive sign for the direction of interest rates, I don’t know what is.
“It is now more important than ever to look at the whole market and make sure that when you make a purchase or take out a new mortgage, you keep an eye on interest rates.
“I’ve made four changes to one customer’s mortgage application in the last six weeks alone, and if you go straight, a lender simply won’t notify you of these changes or encourage you to adjust your rate.”
Data from Geldfeitenprijs.nl shows that the average mortgage interest rate has fallen considerably since the beginning of July.
In the first week of July, the typical two-year fixed rate was 5.93%, but today it is 5.62%. For a period of five years, the average interest rate has fallen from 5.51% at the beginning of July to 5.25% now.