TSB becomes the latest lender to reprice as interest rates are cut by as much as 0.45%.
The bank has reduced the purchase interest rate for two-year permanent homes by a maximum of 0.45%.
However, TSB is increasing the rates for product transfers and additional loan products.
Product transfer for two- and five-year fixed rate homes between 0% and 90% Loan-to-Value (LTV) will increase by up to 0.15%, while the two- and five-year fixed rate buy-to-let (BTL) between 0% and 75% LTV will increase by up to 0.15%.
Additional loans for all residential and BTL fixes will increase by as much as 0.15%.
Commenting on TSB’s product changes, Aaron Strutt, product and communications director at Trinity Financial, said: “TSB is following Santander in making some significant rate cuts, which is very welcome news for anyone looking for a more competitively priced mortgage.”
“It seems likely that the other major lenders will announce rate cuts soon. TSB has recently implemented a pair of 0.5% rate hikes, so it’s great to see the bank cutting prices again. Coventry has also announced it will be cutting some of its interest rates.”
John Charcol, technical mortgage manager Nicholas Mendes, added: “TSB following Santander with rate cuts is a sign that lenders are starting to respond to the recent softening in the swap markets, rather than simply holding prices and defending them.”
“In recent days, the movement in swaps has been meaningful. Two-year SONIA swaps have fallen from 4.111% to 4.000%, three-year from 4.084% to 3.980% and five-year from 4.098% to 4.012%.”
“That’s not a dramatic reset, but it’s a solid step down and enough to give lenders more confidence to start repricing.”
“After what has been a very turbulent few weeks, this is probably the first point where the market feels a little calmer. It gives lenders the chance to make price changes without the same immediate fear that sudden market swings will push funding costs or service levels off course. Santander moved yesterday and TSB is now one of the first of the major major lenders to follow.”
“Other lenders have also made cuts in recent days, demonstrating a willingness to remain competitive as others prepare for similar changes.”
The important caveat is that this is still selective and not broad-based. TSB is reducing selected interest rates on home purchases with a term of up to 0.45%, but is also expanding parts of its product transfer and top-up loans by up to 0.15%.”
“Santander’s changes also focused more on the purchase and transfer of selected products, rather than a blanket reduction across the board, so this is better news, but it is not yet a complete market turnaround.”
Santander will reduce rates on its higher LTV products from April 16.
These include all first-time buyer products with an LTV of 85% to 95% with a two-year fixed term, up to 0.28%.
The reductions will bring Santander’s first-time buyer rates to 85% LTV or higher, starting at 4.90%.
Other rate cuts for first-time buyers include the 90% LTV two-year tracker rate, which will be reduced by 0.30%, while all 75% LTV 10-year fixed rates will be reduced by up to 0.15%.
Santander is reducing rates on its range of exclusive new-build products for first-time buyers, relocations and large loans.
For movers, all 60% to 95% LTV two-year fixed rates will be reduced by up to 0.28% and all 60% to 95% LTV two-year tracker rates will be reduced by up to 0.25%.
The 90% LTV two-year tracker rate for starters on new construction projects will be reduced by 0.30%.
In addition, all two-year fixed interest rates with an LTV of 85% to 95% will be reduced by up to 0.28%.
All new-build homes with a fixed rate of 60% to 95% LTV with a two-year term will be reduced by a maximum of 0.28%, while all 60% to 95% LTV with a two-year term will be reduced by a maximum of 0.25%.
Santander head of mortgage trading Ben Merritt said: “It is normal for those looking to buy, move or remortgage in the current market to feel uncertain about what to do next. Although the recent trend has been for interest rates to rise, we are pleased to be able to pass on a reduction in funding costs following a fall in swap rates.”
Elsewhere, Atom Bank has cut rates on its near-prime mortgage range.
All near-prime products, both for purchase and remortgage purposes, have been reduced by 0.20%.
The reductions apply immediately and mean interest rates now start at 5.39% for those borrowing at an LTV of up to 60%.
Richard Harrison, head of mortgages at Atom Bank, said: “After a turbulent period in the mortgage market, we are pleased to be able to reduce rates on our Near Prime range.”
“This reduction means we can offer even more value to people looking to borrow with less than perfect credit, whether purchasing or refinancing, or the size of their deposit.”
In addition, Fleet Mortgages has implemented rate cuts of 20 basis points on its range of 75% LTV two-year fixed rate mortgage products.
Within both the standard range and the limited company range, the two-year fixed rate products have been reduced from 4.49% to 4.29%.
Both products come with a free valuation, £199 application fee and 3% completion fee (minimum £750).
Fleet’s two-year fixed rate HMO/MUFB mortgage has been reduced from 4.79% to 4.59%.
It also comes with £1,000 cashback, plus £199 sign-up fee and 3% completion fee (minimum £750).
The revised fixed interest rates follow the lender’s launch of new two-year trackers last week for all three core ranges.
Steve Cox, Chief Commercial Officer of Fleet Mortgages, comments: “It is positive to follow last week’s tracker launch with these reductions on our two-year fixed income products, especially given the backdrop of continued interest rate volatility.”
“We are acutely aware that lender advisors and borrowers need to carefully assess their options, balancing short-term pricing, swap rates and bank base rate expectations. These changes are designed to ensure our fixed rate products remain competitive within that mix.”
Meanwhile, Coventry for Intermediaries has announced product changes, effective from April 16.
Home rates for new borrowers will be reduced for all two-year fixed rates for exclusive first-time buyers from 65% to 86% LTV and for all three-year fixed rates for exclusive first-time buyers from 65% to 75% LTV.
The rates for new home borrowers will be increased on all fixed exclusive starter rates with an LTV of 95%.
For BTL and the limited company BTL, all fixed corporate interest rates for new borrowers will be reduced and all fixed remortgage interest rates of 75% LTV for new borrowers will be reduced.