Mortgage Rates Cut - CHG

Mortgage Rates Cut With Interest Rate Reduction

Increased expectations that the Bank of England will cut the base interest rate next month prompt lenders including HSBC to reduce mortgage rates.

Hopes of an interest rate cut by the Bank of England next month have persuaded lenders at three of the biggest banks to cut rates for their mortgages and hopefully give the sales market a boost.

HSBC, Barclays and TSB have all reduced mortgage borrowing rates in the last week.

Firstly, HSBC cut its residential and buy-to-let rates, and Barclays reduced a number of five-year fixed rates including its £999 product fee fix at 60% LTV from 4.47% to 4.34%.

While, TSB reduced its two and five-year fixed rates by up to 0.10%.

FROZEN RATE

The Bank of England froze the base interest rate again earlier this month at a 16-year high of 5.25%.

In a split vote, the Bank’s Monetary Policy Committee decided by 7-2 to retain the same rate until its next meeting on 20 June.

In March, the committee also retained the rate with an almost unanimous vote even though inflation fell to its lowest level in more than two years at 3.4%, and later 3.2%.

AVERAGE RATE STILL RISES

The latest Rightmove tracker shows the average 5-year fixed mortgage rate is now 5.02%, up from 4.59% a year ago, and the 2-year fixed mortgage rate is now 5.42%, compared to 4.92% last year.

Mark Harris, CEO at mortgage broker SPF Private Clients, says: “This latest round of mortgage rate reductions from some big lenders is great news for borrowers.

These cuts should give other lenders confidence to make similar reductions.”
“They come on the back of a decline in swap rates, which underpin the pricing of fixed-rate mortgages, over the past week,” he says

“These cuts should give other lenders confidence to make similar reductions, which will stimulate activity and provide a welcome boost for the market.”

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