Boost for borrowers as three major UK banks reduce their mortgage rates in latest sign of relief for households

Three major UK banks have reduced mortgage rates in a boost for borrowers.

HSBC, Barclays and TSB revealed that they were cutting the cost of home loans – in the latest sign of relief for households, who are also benefiting from falling inflation.

David Hollingworth, associate director at L&C Mortgages, said there was ‘every chance’ that more banks would follow.

The lenders’ move comes just days after the Bank of England indicated it could lower interest rates as soon as next month.

HSBC is reducing mortgage rates on more than 100 of its fixed deals – with two, five and ten-year terms – for homeowners as well as landlords.

Meanwhile, Barclays is cutting rates on some of its deals by up to 0.45 percentage points. The rate on one of its five-year fixes, for borrowers remortgaging with a 40 per cent deposit, will go down from 4.77 per cent to 4.32 per cent. TSB has lowered rates on some two and five-year deals by up to 0.1 percentage points.

Mortgage rates are set independently, but they tend to anticipate the market’s view of the path of the Base Rate, which is currently 5.25 per cent.

But last week the Bank of England gave its clearest signal yet it could cut its rate this summer. Governor Andrew Bailey said the fight against inflation was ‘moving in the right direction’ and did not rule out that a cut could come as soon as June.