Family Building Society slashes rates, announces 60% OO mortgage LTV

Family Building Society has cut interest rates by up to 35 basis points and reintroduced a 60% loan-to-value (LTV) offering in owner-occupied mortgages.

The mutual said on Friday it was reducing two-year fixed rates in its buy-to-let range by 25 basis points and five-year fixed rates by 15 basis points. Product transfers and further advance rates for existing customers also fell, and lower LTV tiers have returned in the owner-occupier range.

Those moves arrive amid a flurry of rate cuts by other lenders after promising news on the Iran war, which has caused chaos in the mortgage market over the past several weeks.

Family Building Society head of intermediary sales Darren Deacon cited the ongoing US-Iran truce in that conflict as a direct reason for the moves.

“Although it’s anybody’s guess how long the fragile ceasefire will last, the relative stability in the Gulf has been reflected in market sentiment, allowing us to be able to make these rate reductions and to reintroduce pricing for lower LTVs,” he said.

“We completely understand the frustration that our intermediary partners are experiencing right now, but I’m hopeful that this new expanded and reduced-rate product will provide some welcome good news to borrowers and those looking to remortgage.”

Mortgage professionals have sounded a note of cautious optimism on the interest rate front, welcoming the trend towards lower rates but noting that borrowers are still nervous about the overall outlook as uncertainty lingers about the economic impact of the war.

Other lenders to cut rates this week include HSBC, Halifax, and Santander.

The latest reductions, arriving just weeks after major lenders began hiking rates and withdrawing products, show how sensitive mortgage pricing remains to shifts in geopolitical risks and market sentiment, with even modest improvements in the outlook translating into meaningful product changes.