Three UK banks announce cuts to cost of fixed-rate mortgages

Original Article:

Source: Link

Three UK banks have announced cuts to the cost of fixed-rate mortgages, reversing some of the price rises seen in recent weeks. Barclays Bank has announced it will reduce the price of five-year fixed-rate deals for new borrowers and remortgagers by up to 0.45 percentage points from Friday. Its five-year fixed-rate for borrowers with a 40% deposit is decreasing from 4.47% to 4.34%. At HSBC there will be cuts to two-, three- and five-year home loans, and the bank has withdrawn the 10-year fixed-rate mortgages it offers to remortgage customers. TSB will also make changes on Friday, and cut two- and five-year deals for house purchases by up to 0.10%. In recent weeks lenders had been increasing the price of mortgages as the prospect of a spring interest rate cut from the Bank of England receded. However, money market “swap rates” on which most fixed-rate deals are based have started to fall this week. Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “This latest round of mortgage rate reductions from some big lenders is great news for borrowers. “They come on the back of a decline in swap rates, which underpin the pricing of fixed-rate mortgages, over the past week. “These cuts should give other lenders confidence to make similar reductions, which will stimulate activity and provide a welcome boost for the market.” Figures from the financial data firm Moneyfacts have shown little movement in mortgage rates in recent days. The latest put the average two-year fixed residential mortgage rate at 5.92%, unchanged from the day before, while the average five-year rate remained at 5.49%. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Despite the rate cuts, anyone remortgaging from a two-year fixed rate mortgage still faces a big increase in repayments: in May 2022 the average cost of one of those deals was 3.03%. A Reuters poll published on Thursday found just over half of economists questioned expected the Bank to reduce rates to 5% in August, while just over 43% thought a cut could come in June.