Barclays, Halifax and NatWest have slashed mortgage rates again this week, with a number of deals under five percent now on offer.
Even with swap rates, which are what lenders use as one of the factors to price mortgages, increasing slightly in the past few days, lenders seem ready to reduce their margins in what appears to be an effort to secure business and boost activity.
NatWest is now offering a two-year fixed remortgage from 4.87 percent with a £1,495 fee (or £995 if it qualifies for a Green deal), and a 5.64 percent five-year fixed with no fee for purchase at 95 percent Loan to Value (LTV).
Meanwhile, Barclays has lowered some remortgage products by as much as 0.57 percent, as well as implemented a range of reductions across its 85 percent to 95 percent LTV purchase-only products.
Halifax has announced up to 0.72 percent off a number of their deals, too.
Sharing his views on the platform Newspage, Ken James, director at Contractor Mortgage Services commented: “Once more into the breach the UK’s banks go. The rate war drum is now becoming louder by the day.
“Rates are coming down around our ears, which for borrowers is fantastic news as long as they have not passed the point of no return in their mortgage process.
“After rate cuts from Barclays that will take effect from Tuesday, we now have Halifax and Natwest announcing reductions. There is a real frenzy among lenders fighting for every scrap of business they can get as they head towards the end of the year.”
Mr James added: “I am getting calls and emails daily from clients understandably asking me to check and double-check to see if they can squeeze an extra bit of savings from the deals already secured. I wonder when the drums will silence.”
Justin Moy, managing director at EHF Mortgages, said: “Just when you think lenders may have run out of margin to play with, two or three of the big players suddenly dig deeper into their pockets and find some more to give away.
“NatWest has pushed their headline two-year fixed remortgage deal to 4.87 percent with either a £995 or £1495 fee for those with 40 percent equity in their homes, but there is even a reasonably priced five-year fixed rate at 5.64 percent for those purchasing with a five percent deposit.
“It’s clear that lenders are desperately trying to fill their application numbers ready for 2024, even if profit margins are being severely squeezed as a result.”
Steven Hargreaves, mortgage and protection adviser at The Mortgage Co added: “Does the latest round of cuts question the margins lenders were making on their fixed rate mortgages?
“We have seen cut after cut in the past couple of months when swap rates have only reduced slightly however when rates increased in June we were told this was a direct result of swap rates increasing.
“Maybe lenders cutting margins is the sign buyers need to see. It can only be good news for existing borrowers with deals coming to an end, and new borrowers coming into the market.”
