The mortgage battles continue as a range of high street banks and mutuals have lowered mortgage rates this week.
Santander has lower selected residential fixed and tracker rates in the new business and product transfer ranges, along with buy-to-let products, and is adding a range of three-year fixed buy-to-let deals.
Meanwhile, fellow high street lender TSB continued the rate-cutting trend for lenders, as it reduced rates by up to 0.5% across its product range.
It dropped rates on its two-year fixed purchases for first-time buyers and home movers to 5.09% at 60% loan to value (LTV) with a £999 fee, while the fee-free deal sits at 5.49%.
This compares to the average two-year fixed mortgage rate of 5.85%, which is down from 6.31% a year ago, according to Rightmove’s latest figures.
The three-year fixes at TSB begin at 4.99% up to 60% LTV and for 85-90% LTV rise to 5.64%, each coming with a £995 fee.
Mutuals drop rates this week
Newcastle Building Society also announced lower rates this week by reintroducing a two-year 95% LTV at 6.44%. This comes with the incentives of no product fee, a free valuation and £200 cashback. It also is on the market with an alternative £999 fee at 5.99%.
Newbury Building Society followed suit by dropping rates on residential three-year fixes for new borrowers and current customers.
Offers include a three-year fixed rate standard product at 75% LTV, down from 5.79% to 5.59%. Three-year fixes for standard residential products plummeted by the same amount – down to 5.49% – while five-year fixed rates were slashed even further from 5.69% to 5.39%.
Based on Rightmove’s numbers, the current average five-year fixed mortgage rate is now 5.38%, compared to 6.11% a year ago.
Yesterday (24 October), Skipton Building Society completed the rate cuts from mutuals by reducing prices across 100 of its products across its buy-to-let, residential and first-time buyer government scheme mortgages.
‘Market is still expecting base rates to be held next week’
Rightmove’s mortgage expert Matt Smith said: “Last week’s inflation numbers have not had any material impact on rates, and they’ve continued to slowly creep downwards. It could be just a matter of days before we start seeing sub 5% rates in the higher LTV brackets, which would be a first since June and could help to spark a new wave of home-mover confidence. The market is still expecting base rates to be held next week, so we’re likely to see mortgage rates continue to trend downwards in the coming week.
“As attention turns to next month’s Autumn Statement, the rumoured mortgage guarantee scheme renewal would be some support for those small-deposit movers. Anything that can help those with smaller deposits is always welcome, but we know the vast majority of borrowers opt for a lower LTV mortgage if they can, to avoid higher monthly payments.
“Whilst cancelling the scheme may be seen as a disappointing outcome by some, in reality it is unlikely to have a significant impact on consumer choice, as many lenders are offering 5% deposit deals outside of the government scheme.”
