This week, three large UK lenders have announced that they will cut the cost of home loans as mortgage rates continue to fall due to an improving outlook for inflation.
Last week, Nationwide, Barclays TSB, HSBC and Barclays cut , offering homeowners further relief.
Aaron Strutt said that more banks and building society have lowered their rates to attract more customers in the last few weeks. “We’re starting to see changes in acceptance criteria to make it easier for people to get mortgages, and we even have seen the return of lower interest rates offered for one week to entice borrowers into action.”
Virgin reduced costs by up to 0.41 percent on certain products that were offered through brokers, while Halifax lowered the rate of its fixed-rate five-year remortgage by 0.18 percentage point and its 10-year product by 0.27 percentage point.
NatWest has informed brokers that it will cut rates for both purchases and remortgages up to 0.30 percent points on products with a two-year and five year term, starting Wednesday.
Foundation Home Loans, Vida Home Loans, and other smaller lenders have also reduced their rates. Accord, the intermediary-only division of Yorkshire Building Society, has also reduced some of its buy to let mortgages.
The persistently high of the past year has caused a rise in mortgage rates. A larger-than-expected decline in official inflation data from June helped stabilize the financial markets. Lenders also moved to reduce their funding costs.
The official data released Monday showed that UK Mortgage Approvalsrose during June. Consumer credit grew at its fastest rate in five years, despite predictions that the mortgage market will soften due to high interest rates.
Dan Frumkin said the mortgage market would remain strong despite macroeconomic pressures and inflation.
“I believe it’s more buoyant than people think. We anticipate lower origination volume, but we do not anticipate it to be as bleak and gloomy as some think.”
Frumkin stated that even though the Bank of England is expected to increase base rates on Thursday, it should not impact mortgage costs as they are based on swap rates which are based upon the market’s expectations for inflation.
Moneyfacts reports that the average price of a two-year fixed mortgage is 6.85 per cent, almost 20 basis points above last October’s . Moneyfacts reports that the average cost of a fixed-rate mortgage for two years is 6.85 percent, which is almost 20 basis point higher than ‘s high from last October.