Borrowers looking for a two-year fixed deal could see rates fall below 5%, say several leading mortgage brokers.
After Virgin Money priced its two-year fixed rate for a maximum 60% loan to value (LTV) at 5.26%, a batch of cheaper prices have been predicted to hit the mortgage market.
This deal, reported in YourMoney.com’s best residential mortgage rates last week, came after the Bank of England held its base rate for a second successive month. The base rate now stands at 5.25% after a fourteen-month streak of hikes.
Considering the next best two-year fix is 5.49% from Barclays, it might not look like rates will be beginning with the digit ‘four’ across the board just yet.
However, with the mortgage wars among lenders leading to three months of cuts, and Christmas just round the corner, experts are predicting that discount rates on the cards.
When on lender goes, the rest will follow
Jamie Lennox, director at Dimora Mortgages, said: “The race to be the first mortgage lender with a two-year fixed rate starting with a four has certainly heated up following the Bank of England’s decision to hold the base rate last week.
“Time will tell who will be the first to take that leap, but it will be like Black Friday come early for borrowers when it arrives.”
The consensus among brokers on Newspage, is that when one lender goes big on the next round of cuts, the rest will follow.
Steven Hargreaves, mortgage adviser at The Mortgage Co, said: “It looks like the next round of rate cuts is starting. Once one of the major lenders reduces rates, Halifax in this case, they all tend to follow like dominos. This is great news for first-time buyers and any customers who have deals that are due to come to an end soon.”
The managing director at EHF Mortgages, Justin Moy, agreed: “We are definitely edging towards a Black Friday fire sale, if there has ever been such a thing for mortgages. Borrowers looking to celebrate sub-5% two-year fixed rate deals need to hang up the bunting, as it looks like it will be time to celebrate very soon.”
