Lenders respond to falling swap rates as competition heats up
Barclays and HSBC have both made mortgage rate reductions, joining several other lenders responding to falling swap rates and growing expectations of a Bank of England base rate cut later this year.
Barclays announced wide-ranging cuts across its residential purchase and remortgage products. The lender has reduced fixed rates at multiple loan-to-value (LTV) tiers, with changes applying to both standard and Green Home mortgage ranges.
For residential purchases, Barclays’ two-year fixed rate at 85% LTV with an £899 fee has dropped from 4.23% to 4.14%. The five-year fixed at 60% LTV with no fee is now 4.09%, down from 4.20%. Other notable changes include the five-year fixed rate at 75% LTV with an £899 fee falling to 4.12%, and the 90% LTV Premier five-year fixed dropping from 4.17% to 4.13%.
Green Home products have also seen reductions, including the two-year fixed at 85% LTV with an £899 fee cut to 4.04%, and the five-year fixed at the same LTV tier dropping from 4.28% to 4.11%.
Barclays’ remortgage rates are similarly lower. The Great Escape two-year fixed with no fee at 60% LTV has dropped to 4.15%, and the five-year equivalent now stands at 4.09%. Premier and standard five-year remortgage rates at 60% LTV with a £999 fee have fallen to 3.92% and 3.93%, respectively.
HSBC also reduced rates across its residential and buy-to-let (BTL) product range. For existing residential customers, two-year fixed saver rates have been lowered at 60%, 80%, 85%, and 90% LTVs.
The lender has also cut prices on standard two-year fixed remortgage options across LTVs from 60% to 85%. In the buy-to-let segment, the two-year fixed premier exclusive product at 60% LTV was among those reduced.
Meanwhile, other lenders including TSB, Principality Building Society, and Market Harborough Building Society are also reducing rates.
TSB is repricing a range of its product transfer and additional borrowing rates, lowering them by up to 0.20%, while Principality is cutting residential rates by up to 0.49% and buy-to-let rates by up to 0.50%. Market Harborough will reduce its standard variable rate by 0.20% and trim several specialist mortgage products, including those for expats and larger loans.
“Monday has kicked off with a flurry of rate reductions among lenders as they battle it out ahead of the summer holidays, said Nicholas Mendes, head of marketing at broker firm John Charcol. “The direction of travel over the past month has been fairly clear. Swap rates, which heavily influence fixed rate mortgage pricing, have continued to fall quite noticeably.”
Mendes noted that while market confidence in a base rate cut is growing, “borrowers shouldn’t become complacent,” urging those approaching the end of their fixed terms not to delay securing new deals.
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