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0 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 remortgagors 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At HSBC there will be cuts to two-, three- and five-year home loans, and the bank has withdrawn the 10-year fixed-rate mortgages it offers to remortgage customers.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%.
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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.
