Mortgage lenders are preparing to drop their rates following the Bank of England governor’s statement that the bank could be more “aggressive” with its rate cuts.
Governor Andrew Bailey’s comments about rate cuts in an interview with The Guardian, which hinge on inflation remaining stable, prompted mortgage swap rates to fall and some lenders to begin repricing mortgage rates.
The pound also fell sharply following the news.
Two-year swaps have fallen from 3.91% to 3.85% since yesterday and five-year swaps are down from 3.63% to 3.6%.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said Coventry Building Society’s two- and five-year fixed rates, which topped the best buy tables at 3.89% and 3.69% respectively, were being withdrawn this evening.
HSBC is in the process of repricing downwards today, while NatWest and Barclays have told brokers they are repricing tomorrow, according to Harris.
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Mortgage rate war among lenders
“A more aggressive approach to rate reductions has been welcomed by the markets, with swaps falling on the back of the governor’s comments, which should feed through to even lower mortgage pricing,” he said.
“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% for those borrowing 60% loan to value (LTV) and a five-year fix at 3.68%, also at 60% 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,” he added.
