Rate reductions from Barclays, HSBC, and others signal increased lender competition
Barclays, HSBC, TSB and Accord Mortgages have each introduced new reductions to their mortgage rates, with changes affecting a range of residential and buy-to-let products.
The latest adjustments reflect ongoing competition among lenders and follow previous lender rate cuts made earlier in the month.
Barclays has lowered rates on several purchase products, including a two-year fixed deal at 60% loan to value (LTV) with a fee of £899, now available at 3.73%. The equivalent Premier product is priced at 3.72%. For borrowers seeking a fee-free option at this LTV, the rate stands at 4.06%. At 95% LTV, the fee-free two-year fixed rate has been reduced to 4.82%.
Five-year fixed rates have also been cut, with the 60% LTV product with an £899 fee now at 3.98%, and the Premier version at 4%. The fee-free five-year fix at 60% LTV is now 4.09%. At 95% LTV, the fee-free five-year fix has dropped to 4.79%.
Barclays’ green purchase products have also seen reductions, with the fee-free two-year fix at 60% LTV now at 3.83%, and the five-year fix with an £899 fee at 3.88%. These changes take effect from today.
HSBC has also announced rate reductions. The changes apply to a range of products, including those for existing customers wishing to switch or borrow more, as well as first-time buyer, homemover, and remortgage rates.
Buy-to-let remortgage, switching and borrowing more rates, along with international residential and buy-to-let rates, have also been lowered by the high street lender.
Elsewhere, TSB has introduced cuts across its residential mortgage range, with two-year fixed purchase rates reduced by up to 0.20% and remortgage rates by as much as 0.10%. Two-year fixed shared ownership and shared equity purchase rates have also been lowered by up to 0.2%.
In addition, two-year fixed product transfer and additional borrowing rates at 60 to 75% LTV have each been reduced by 0.05%. The additional borrowing rate is now 4.29%, while product transfer pricing starts at 3.99% with a £1,495 fee.
Meanwhile, Accord Mortgages, the intermediary-only lending arm of Yorkshire Building Society, has also implemented rate reductions today, building on recent enhancements to its product range.
The new rates include cuts of up to 0.23% for residential products up to 75% and 80% LTV, and reductions of up to 0.20% for products up to 85% and 90% LTV. Products for those with deposits up to 95% LTV have been reduced by up to 0.13%.
The lender’s first-time buyer exclusive range and its 5K Deposit Mortgage, which allows buyers with a £5,000 deposit to purchase properties valued up to £500,000, have also seen reductions, with the latter now at 5.34%. Buy-to-let products have been cut by up to 0.20% for loans up to 80% LTV, up to 0.20% for those up to 65% LTV, and up to 0.22% for products up to 75% LTV.
“The recent wave of mortgage rate cuts is largely being driven by growing market confidence that the Bank of England will lower the base rate again before year-end,” said broker Euan Stewart of Perth Mortgage Centre. Lenders are pricing in this expectation early, competing aggressively to attract borrowers.
“Inflation has cooled more than expected, and economic data suggests the UK may avoid a deep recession—both factors giving lenders wiggle room to reduce rates.”
Another broker, Alan Greenin of Marble Financial Planning, attributed the lenders’ ability to reduce rates to movements in swap rates and inflation.
“As inflations eased off, lenders have relaxed a little,” he said. “And while I don’t have a crystal ball, I’d like to think this will carry on into November. A little pre-Christmas rate drop would be lovely, wouldn’t it?
“Clients are loving the new lower rates, and I don't often hear of people waiting to move or remortgaging as they are hoping for real low rates. I hope most realise 3-5 is the norm for a while.”
For Kessar Salimi of Freedom Financial, however, it is business as usual. “The cuts are quite small,” he said. “We review clients rates right up to completion and change it if it improves.
“For residential buyers, it’s more about how much they can borrow and is there enough properties for sale. For investors, cashflow and availability of deals is most important. Rate cuts are a welcome bonus.”
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