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Mortgage wars heat up as Santander, Virgin, NatWest and HSBC slash rates

Nick Cheek
Written By:
Nick Cheek

The ongoing mortgage rate reductions are heading towards a third month, with existing customers and new buyers both benefiting from lenders’ cuts.

Today, Virgin Money decreased rates for existing deals and exclusive remortgage rates. In terms of fixed rates for remortgage and purchase, there is a two-year fixed rate available up to 60% loan to value (LTV) at 5.17% and a five-year fixed rate available to 75% LTV at 5.57%.

HSBC have continued the trend of cutting existing residential rates, with two-year fixed fee-savers deals at 70% and 75% LTV going down, as well as two-year fixed rate standard deals at 85% LTV. In its existing buy-to-let customer switching and borrowing more range, five-year fixed standard deals up to 65% LTV are going down.

Santander has also cut all standard residential fixed rates by between 0.03% and 0.33% and new build exclusive fixed rates have fallen up to 0.23%.

Meanwhile, NatWest will lower rates in its new and existing customer ranges by up to 0.29 per cent for select deals from tomorrow.

Overall, the average two-year fixed rate up to 60% LTV is 5.72% and the average two-year fixed mortgage rate up to 75% LTV is 5.89%, according to Rightmove data. The average 5-year fixed mortgage rate is now 5.54%.

‘Continued stability in the mortgage market’

Rightmove’s mortgage expert Matt Smith commented: “Following the positive news on inflation and the Bank of England’s decision to hold the base rate, we have seen swap rates, the underlying costs of fixed rate mortgages, stabilise.

“The important takeaway from last week for those looking to take out a mortgage soon is that the expectation that the Base Rate has now peaked is now the predominant view of the market, although there is still a sizeable but decreasing risk that we may see one more increase this winter.

“As we approach the final quarter of this year, we are likely to see continued stability in the mortgage market persist with rates continuing to gradually drop and more lenders likely to offer sub-5% deals. After what has been a rollercoaster twelve months for mortgage rates since the mini-budget, this will be welcome respite for home-movers after what continues to be a difficult adjustment from the prolonged period of ultra-low rates.”

‘Light at the end of the tunnel’

Following another round of widespread rate cuts, David Hollingworth, associate director at Land and Country mortgages, said: “After the false start of rates falling back in the early part of 2023, borrowers may now be able to look ahead with some more confidence, given the fact that fixed rates are falling and the hold in base rate signals that we’re close to, if not at the peak.

“We’ve already seen improvements in fixed rates and that looks set to continue or even accelerate in light of improved inflation figures and a hold in interest rates.  After a tough year there may now at least be some light at the end of the tunnel.”