Five more mortgage lenders have today announced cuts to home loan prices.
Barclays, HSBC, Halifax, Santander and NatWest are all making a number of interest rate reductions across various mortgage deals.
It marks the latest flurry of mortgage rate cuts in what is becoming an ever cheaper market for Britain’s borrowers.
Since the start of July, the lowest five-year fixed rate mortgage has fallen from 4.28 per cent to 3.69 per cent.
Battle to the bottom: Barclays, HSBC, Halifax, Santander and NatWest are all making a number of interest rate reductions across various mortgage deals
Meanwhile, the lowest two-year fix has fallen from 4.68 per cent to 3.89 per cent.
Barclays set the wheels in motion this morning when it announced a whole raft of cuts primarily benefiting first-time buyers and home movers, including a number of sub 4 per cent deals for those with the biggest deposits.
Its lowest two-year fix for buyers with a 40 per cent deposit or more, is falling to 3.99 per cent from tomorrow.
On a £200,000 mortgage being repaid over 25 years, that would equate to £1,055 a month.
For buyers with a 15 per cent deposit, Barclays will be offering a rate of 4.46 per cent, which unless beaten by tomorrow, will be a new best buy.
Barclays says it is also reducing rates across its springboard and mortgage guarantee products aimed at first-time buyers struggling to raise a deposit.
The Barclays Springboard mortgage requires family or friends to help with the deposit.
In this case, the helper provides a 10 per cent deposit as security for five years and it’s placed into a Helpful Start account that earns interest and is returned after five years.
HSBC cuts rates
Shortly after Barclays, we received word that HSBC is making another wave of mortgage rate cuts.
It says all its residential and buy-to-let deals are being reduced by up to 0.16 percentage points.
HSBC confirmed its two-year and five-year fixed mortgages for both home movers and first time-buyers are reducing by up to 0.25 percentage points.
Its lowest five-year fix for those remortgaging with at least a 40 per cent equity is now priced at 3.83 per cent.
For those needing a mortgage to cover 70 or 75 per cent of their home’s market value, HSBC’s five-year products come with a £999 fee and are also priced below 4 per cent at 3.99 per cent.
HSBC has also made further reductions in the higher loan-to-value ranges for first-time-buyers, offering 4.16 per cent to those fixing for five years with a 20 per cent deposit. The deal also offers £350 cashback.
Home movers buying with a 15 per cent deposit can now secure 4.16 per cent when fixing for five-years with HSBC.
Landlords looking to remortgage buy-to-let investments they hold in their own name, will also have reason to cheer.
Those fixing for five-years can remortgage with HSBC at a rate of 3.99 per cent with a £1,999 product fee if they have at least 35 per cent equity in the property.
On a £200,000 interest only mortgage that would mean paying £664 a month.
Given the average five-year fixed rate across the entire market is 5.25 per cent, according to Moneyfacts – that could represent a monthly saving of £211.
Homeowners rejoice: Halifax is cutting its remortgage rates by up to 0.24 percentgage points
Halifax cuts rates
Halifax then followed suit, by cutting mortgage rate on selected products by up to 0.11 percentage points for home movers and first time buyers.
Homeowners due to remortgage will benefit even more, with Halifax announcing reductions of up to 0.24 percentage points.
The mortgage rates will take effect from tomorrow.
Nicholas Mendes, technical manager at mortgage broker John Charcol said: ‘The latest round of rate reductions announced by Halifax comes as little surprise, given the broader trend observed in the market over the last few days.
‘With HSBC and Barclays leading the way with similar rate cuts, Halifax’s move appears to be part of an industry-wide recalibration in mortgage pricing.
‘Halifax’s reduction in rates indicates a targeted strategy to attract both new customers and retain existing ones.
‘Extending the completion dates on all products also provides borrowers with added flexibility.
‘The continued repricing across various types of mortgage products reflects the banks’ efforts to enhance competitiveness.’
Santander and NatWest cut rates
Santander and NatWest also announced a wide range of range cuts for tomorrow.
From tomorrow, home buyers and people remortgaging wil see Santander’s fixed rate deals drop by 0.29 percentage points.
It means from tomorrow Santander will offer the lowest five-year fix on the market for home buyers purchasing with the biggest deposits.
All its mortgage rates for new build purchases are also reducing by up to 0.19 per cent alongside all its buy-to-let fixed rates, which are dropping by up to 0.17 per cent.
NatWest, meanwhile is also executing some healthy cuts across fixed rate deals aimed at home buyers, remortgagers and landlords.
Mark Harris, chief executive of mortgage broker SPF Private Clients said: ‘A number of lenders are already in the process of repricing – Coventry’s two and five-year fixes which top the best buy tables at 3.89 and 3.69 per cent respectively are being pulled tonight, while HSBC is repricing downwards today and NatWest and Barclays are repricing tomorrow.
‘Santander is also repricing tomorrow and is likely to top the ‘best buys’ with its new deals – a two-year purchase option at 3.84 per cent for those borrowing 60 per cent loan-to-value and a five-year fix at 3.68 per cent, also at 60 per cent LTV.
‘This ongoing rate war among lenders is great news for borrowers as there are some really compelling deals being launched, which will go some way to helping affordability.’
Will mortgage rates go lower?
Today’s mortgage rate cuts comes after Bank of England governor, Andrew Bailey, singalled the central bank could take a ‘more aggressive’ approach to interest rate cuts if the economic conditions allow.
The Bank of England chose to hold base rate at 5 per cent last month, having opted to cut at the start of August.
‘Following the Governor’s comments, which signalled potential lower long-term rates, markets are likely to readjust their forecasts,’ added Mendes.
‘If the Bank of England cuts the base rate to 4.75 per cent or even 4.5 per cent by the end of this year, it could have a significant impact on mortgage rates across the board.’
Mark Harris, chief executive of mortgage broker SPF Private Clients said a more aggressive approach to rate reductions has been welcomed by the markets
‘With Swaps falling on the back of the Governor’s comments, this should feed through to even lower mortgage pricing,’ said Harris.
How to find a new mortgage
Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.
What if I need to remortgage?
Borrowers should compare rates, speak to a mortgage broker and be prepared to act.
Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.
Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.
Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people’s borrowing ability and buying power.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a broker.
This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.
Interested in seeing today’s best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.
If you’re ready to find your next mortgage, why not use L&C’s online Mortgage Finder. It will search 1,000’s of deals from more than 90 different lenders to discover the best deal for you.
> Find your best mortgage deal with This is Money and L&C
Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
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