Following a period of increasing costs linked to the Iran conflict, a number of major banks have announced cuts to their mortgage rates in response.
HSBC is scheduled to implement rate reductions tomorrow across its residential and buy-to-let mortgage offerings, with details set to be disclosed upon the changes taking effect.
Similarly, TSB is set to decrease rates on its two-year fixed house purchase mortgages by up to 0.45% from Friday onwards. However, certain other TSB mortgage rates will see increases, including those for product transfer deals and additional borrowing.
Halifax has also announced upcoming reductions in fixed rates for home mover and first-time buyer mortgages by as much as 0.35% starting Friday.
Santander made the first move amongst major lenders by cutting select mortgage products by up to 0.28% on Thursday, attributing this action to a decrease in borrowing costs following a decline in swap rates utilized for loan pricing.
According to the latest data from Moneyfacts, the average two-year fixed mortgage rate on Thursday morning was recorded at 5.88%, down marginally from Wednesday’s figure. Meanwhile, the average five-year fixed rate remained unchanged at 5.77%.
In early March, the average two-year fixed-rate mortgage stood at 4.83%, while the average five-year fixed-rate deal was at 4.95%.
The surge in mortgage rates was driven by concerns over potential inflation spikes due to the Iran conflict, leading to expectations of prolonged high interest rates by the Bank of England.
Moneyfacts reported a total of 6,665 homeowner mortgage products available on Thursday, indicating a stabilizing trend in rates following the recent fluctuations.
Adam French, consumer finance head at Moneyfacts, noted that average mortgage rates have remained steady post-Easter, suggesting a temporary plateau in the rate increases. He also highlighted the gradual return of mortgage product offerings, with 809 deals re-entering the market since hitting a low point on March 24.
Despite recent rate cuts by certain lenders, the mortgage pricing landscape remains sensitive to market expectations and potential shifts, influenced by ongoing geopolitical uncertainties and economic factors like ‘Trumpflation’.
