Santander and Barclays reacted to the Bank of England cutting the base rate to 4.5% with mortgage rate cuts for borrowers, who have mostly had increases to contend with in recent months.
As it stands today (14 February), the average rate for a two-year fix is 5.44%, while the five-year equivalent is 5.26%, according to data from Moneyfacts.
Here’s a round-up of the biggest movements in the mortgage market this week.
Santander kicks off cuts
Santander became the first high street lender to cut rates to sub-4% this year, but it wasn’t the last.
The lender introduced four new sub-4% mortgage deals on two- and five-year fixed rate terms at 60% loan to value (LTV) for residential purchase and remortgage. Pricing for the deals starts at 3.99%.
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The sub-4% mortgage purchase deals come with a £1,999 fee, and remortgage products are subject to a £1,749 fee.
Santander will also release a range of 65% LTV options for buy-to-let (BTL) purchase and remortgage customers, giving them more choice.
This includes a two-year fixed BTL purchase rate at 65% LTV at 4.35%, with its five-year fixed rate standing at 4.32%. Both come with a £1,749 fee.
Barclays joins the sub-4% club
Barclays made similar moves to Santander with the changes to its mortgage range, with some pricing now below 4%. The headline product was a newly launched five-year fixed premier deal, priced at 3.99%.
This has an £899 fee and is available at 60% LTV, with loan sizes between £5,000 and £2m.
The lender also reduced the rate of its five-year fixed green home deal from 4.13% to 3.99%, which is available at 60% LTV with an £899 fee.
Other changes included a fee-free two-year fixed purchase deal at 90% LTV, down from 5.56% to 5.41%, and a fee-free five-year fixed purchase product at 60% LTV, which has been cut from 4.4% to 4.26%.
Across its remortgages, a two-year fix at 60% LTV with a £999 fee is now 4.21%, down from 4.47%, while the option at 75% LTV has a rate of 4.52%, down from 4.64%.
Nationwide’s rate reductions
Meanwhile, Nationwide has lowered rates on select remortgage and switcher deals to support borrowers coming to the end of their deals, the mutual said.
The mutual’s remortgage rates were cut by as much as 0.35%, while switcher rates fell by up to 0.13%.
Its five-year fixed remortgage at 60% LTV with a £1,499 fee now has a rate of 4.12%, while the option with a £999 fee is priced at 4.17%, both having undergone a 0.07% reduction.
The two-year fixed remortgages at the same tier with a £1,499 fee and £999 fee have been reduced by 0.15% to 4.24% and 4.29% respectively.
Its fee-free two-year fix at 60% LTV was cut by 0.16% to 4.63%, while the fee-free option at 90% LTV is now 5.49%, following a reduction of 0.35%.
As part of the mutual’s pledge to its existing borrowers, its switcher rates are the same as or lower than the remortgage options.
This includes the five-year fix at 60% LTV with a £999 fee, which has been cut by 0.06% to 4.12%, and the two-year fixed equivalent, which has gone down by 0.13% to 4.24%.
Nationwide also lowered rates for new and existing borrowers moving home.
There is a two-year fix at 60% LTV with a £1,499 fee, priced at 4.22%, and at 4.27% with a £999 fee for new borrowers. Both have been cut by 0.06%.
There is also a two-year fix at 80% LTV with a £999 fee, which has been cut from 4.74% to 4.64%.
