Mortgage rates fall for eighth consecutive week as Nationwide, NatWest and HSBC drop prices
For the eighth consecutive week mortgage rates have been slashed by enders across the board.
NatWest, TSB, Nationwide, HSBC and Virgin Money all dropped rates as the mortgage price wars continue. The average two-year fixed is currently priced at 6.58%, down from an average rate of 6.60% on the previous working day, according to Moneyfacts figures.
The average five-year fixed residential mortgage rate today is 6.07% which slightly dropped from 6.09% than the day before.
Meanwhile, buy-to-let average market rates have been sliced by a fraction, with two-year rates at 6.48% and five-year rates at 6.36% – a drop of 0.02% and 0.01% respectively.
The rate reductions coincide with the Bank of England’s decision to keep the base rate at 5.25% and bring an end to fourteen months of hikes.
Following the announcement Karen Noye, mortgage expert at Quilter commented: “For those looking to remortgage or take out a new mortgage, lenders will remain stringent in their criteria and rates still are so different to what we have been used to over the past few years.
“Although fixed rates have reduced a little we might not see significant reductions offered to new borrowers or those looking to switch but there is no doubt that things are moving in the right direction.
“It is also worth remembering that lenders are still commercial entities and they will need to compete for custom so price wars might be expected helping to push rates further down especially now the tide is turning.”
Nationwide, Natwest, HSBC and TSB all reduce rates
Last week, HSBC slashed rates from its residential purchase range. Its two-year fixed rate with £999 fee at 60% loan to value (LTV) with £250 cashback fell by 0.18% to 5.71%.
More reductions were made by TSB on its additional borrowing and product transfer accounts. Its five-year fixed additional borrowing options for residential borrowers were lowered by up to 0.15%. Even bigger drops to the tune of 0.25% were made for the 10-year fixes.
NatWest has cut rates across two-year tracker and two and five-year fixed rates for first-time buyers, purchase, shared equity, remortgage, buy-to-let and green mortgages.
Meanwhile, Virgin Money released eight purchase exclusive fee-savers with free valuation, across both two and five-year fixed rates.
Those deals are available from 65 to 90% LTV, starting from 5.84% at 65% LTV for a two-year fixed rate and 5.15% at the same LTV for a five-year fixed rate.
Rate hold ‘particularly welcome for tracker holders’
And, from today (22 September), Nationwide will also be reducing selected fixed rates by up to 0.31%. This will feature on its new business, existing customer moving home, switcher and additional borrowing product ranges.
Reflecting on interest rate cuts and the Bank of England’s announcement, Rightmove’s mortgage expert Matt smith said: “The surprising decision to hold rates rather than raise them as expected is another indication that we may now be at the peak of base rate rises. It will be particularly welcomed by those on a tracker mortgage who won’t see a rise in their monthly payments for the first time since December 2021.
“Today’s decision to pause rates is positive news for prospective home movers, and it is likely that lenders will continue to reduce rates, as we’ve seen over the last eight weeks, and we may see the pace of reductions increase in the coming weeks.
“History tells us that tracker mortgages may now become more appealing to borrowers. Whilst we expect five-year fixed rate products to continue to be cheaper than shorter-term deals for the foreseeable future, borrowers may be more willing to pay a premium to get a tracker or two-year fixed rate mortgage now, anticipating that rates will fall in the medium term, rather than locking themselves into a five-year deal at a high rate.”