Coventry Building Society and HSBC have followed in the footsteps of Barclays and made cuts to mortgage rates this week.
Mortgage prices have been rising steadily over the past months and the Bank of England’s base rate has not budged for months.
But SWAP rates, which are a big influence on lenders’ pricing levels, have improved recently and this is now being passed on to consumers.
We reported earlier this week that Barclays had cut rates on a number of its homebuyer mortgages.
Yesterday HSBC announced it was cutting rates on fixed-rate mortgages for first-time buyers, movers, remortgagers and product switchers. These changes come into effect today (Wednesday 26 June).
Today it was the turn of Coventry Building Society to unveil new price cuts. These included changes to fixed rates for new and existing borrowers.
Emma Jones, managing director at Whenthebanksaysno.co.uk, speaking via the Newspage agency said: “They’re falling like dominoes now. Each day this week, major lenders have announced rate cuts, which is a win for borrowers. Last night’s England game may have been flat but the mortgage market is full of positive energy and momentum.
“Things are suddenly looking considerably brighter for the property market as we enter the second half of the year. Enquiries are up sharply this week, which suggests the improved weather may also have lifted spirits and confidence.”
Mortgage price prospects: Will there be more rate cuts?
With three big lenders making a call to cut their fixed-rates it looks likely more lenders will do the same.
Borrowers who are due to remortgage or about to buy a home may well see better rates and possibly better terms too as lender confidence increases.
August is also the date the markets have pencilled in as being the most likely time for the Bank of England to cut interest rates.
Bob Singh, founder at Chess Mortgages, also speaking to Newspage, said: “The mortgage market has been kicked back into life by lenders who are now firmly expecting possibly two rate cuts by the year end.
“The Federal Reserve [the US central bank] is also pricing in similar cuts. Coventry joined the bandwagon with HSBC and Barclays earlier this week and more will follow.
“This will be encouraging news for those looking to take a mortgage in the short term or renew their super-low rates this and next year. Inflation figures will be key to a sustained reduction in rates but let’s keep an eye on 5 July when the election results are announced. No betting please.”
