Both residential borrowers and landlords are benefiting from price reductions which have come in response to falling swap rates – which lenders use to set pricing.
Swap rates have been falling as a consequence of the economic turbulence the fallout from Trump’s tariffs have created globally.
Experts believe this will prompt the Bank of England to cut interest rates, and they had predicted mortgage lenders would also adjust pricing accordingly.
Coventry’s price cuts have proved the most eye-catching because one of its deals now has an interest rate of 3.89%. Sub-4% deals are not easy to come by in this market and this deal for customers fixing for two-years who need to borrow at 65% loan-to-value (LTV) has therefore attracted attention.
It comes with a £999 fee and is for those purchasing a home with at least a 35% deposit.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Swap rates have fallen which has created room for more movement on mortgage pricing. We’ve reduced rates across our residential and buy to let ranges, with some of the biggest cuts going to two-year fixes – reflecting growing demand for shorter-term flexibility in an uncertain market.
“It’s a step to support those making decisions in a shifting landscape.”
Brokers have welcomed the move from Coventry including Michelle Lawson, director at Lawson Financial speaking through the Newspage Agency, said: “And so it begins. Competitive Coventry have declared their hand with a fantastic rate not seen for a while.
“Tariff wars may be playing out globally but UK borrowers look like they will finally start getting some much needed relief.”
Meanwhile Emma Jones, managing director at Whenthebanksaysno.co.uk also speaking to Newspage, said: “Go go go! This is a fantastic rate from Coventry today. Many brokers will be queuing up at 8pm to take advantage of that rate I’m sure.
“It’s exciting to see more drops below the 4% mark so we can start to close the gap on cost-of-living pains.”
This week’s other mortgage price cuts
It’s not just Coventry Building Society which have been slashing rates on mortgages. On Monday Skipton Building Society made reductions of up to 0.32% on 124 products and TSB announced cuts. Gen H and Pepper have also made price reductions this week.
In the buy-to-let market Paragon Bank has introduced new products and cut rates on all 70% and 75% LTV product for single self-contained (SSC) properties and removed application fees from 75% LTV products with a 3% product fee.
Also, YBS Commercial Mortgages, part of Yorkshire Building Society, reduced rates on its buy-to-let tracker product by 0.25%.
Harry Goodliffe, director at HTG Mortgages speaking to Newspage, said: “Swap rates are sliding on the back of global uncertainty, and that’s fuelling talk of Bank of England rate cuts sooner rather than later.
“If this momentum sticks, we could see a wave of reductions from bigger lenders, too. Borrowers may want to keep their eyes peeled — what looks like a short-term blip could quickly turn into a golden window.”
