Some of the biggest lenders in Britain are said to be making significant cuts to their mortgage rates from tomorrow (August 9). Three major banks will make reductions of up to 0.55 percent on fixed mortgage products, which is set to be good news for many homeowners.
Nationwide Building Society has already announced reductions of up to 0.55 percent on its fixed mortgage products from Wednesday, whilst TSB is making reductions of up to 0.40 percent to selected five-year fixed homeowner mortgages, with rates starting from 5.44 percent.
HSBC UK is also expected to make cuts to residential mortgages on Wednesday, although the bank has not yet given any details. It comes after the Bank of England raised the base rate from 5 percent to 5.25 percent last week in a bid to lower inflation.
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The UK Consumer Prices Index (CPI) inflation was recorded at 7.9 percent in June, slowing from 8.7 percent in May, according to the Office for National Statistics (ONS). This has fuelled expectations that the base rate may not need to climb so high in future.
Swap rates, which underpin fixed mortgage rates, have also stabilised amid claims that inflation is cooling.
Henry Jordan, director of home at Nationwide Building Society, said of the changes planned for Wednesday: “These latest changes build on the reductions we made last week for existing customers.
“With swap rates having fallen from their early July peak and stabilised somewhat, we are now able to reduce rates for new customers.”
Nationwide said that, for new customers moving home, it is making reductions of up to 0.45 percent across selected two-, three- and five-year fixed products.
For first-time buyers, it is making reductions of up to 0.55 percent across selected two-, three- and five-year fixed mortgages.
For remortgage customers, it is making reductions of up to 0.35 percent across selected two-, three- and five-year fixed loans.
However, rates on the society’s range of two-year tracker mortgages will increase by 0.25 percent, in line with product terms, given the recent base rate rise.
There have recently been some signs of average fixed mortgage rates on the market following a more stable trend, after previously jumping as inflation surged.
According to Moneyfactscompare.co.uk, the average two- and five-year fixed-rate home-owner mortgage rates on the market were unchanged on Tuesday compared with Monday, standing at 6.84 percent and 6.35 percent respectively.
Riz Malik, founder and director of R3 Mortgages, told website Newspage: “Many lenders repriced fixed-rate products downwards in the week before the base rate decision. Hopefully, this trend will continue.”
Jamie Lennox, a director at Dimora Mortgages, added: “The next inflation data is going to be key to this downward trend continuing.”
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