Building Society reduces mortgage rates across range by up to 0.2%

Buckinghamshire Building Society has cut interest rates by up to 0.20 percentage points across a raft of its mortgage products.

The reductions, which take effect immediately, apply to standard residential, later life, first-time buyer and expat buy-to-let products to deliver “more competitive” options for all types of buyers.

Claire Askham, head of mortgage sales at Buckinghamshire Building Society, commented: “We’re delighted to reduce rates across our mortgage range, ensuring we deliver ever greater value to brokers and their clients.

“Applying these cuts across such a wide range of products means that brokers have more attractive options for their clients, whether they are first-time buyers, landlords, later life borrowers or expats.”

Ms Askham added: “At a time when price really matters, this is sure to be a welcome move.”

Examples of the new range include:

• Prime 90 percent Loan To Value (LTV) five-year fixed rate - rate reduced from 5.24 percent to 5.05 percent
• Prime 90 percent LTV three-year discount - rate reduced from 5.99 percent to 5.79 percent
• Prime 95 percent (purchases only) three-year fixed rate - rate reduced from 5.89 percent to 5.74 percent
• JBSP Deposit Lite five-year fixed rate - rate reduced from 5.99 percent to 5.89 percent
• Retirement interest-only five-year discount - rate reduced from 5.69 percent to 5.59 percent
• Expat buy-to-let three-year fixed rate - rate reduced from 6.19 percent to 6.09 percent.

Average mortgage rates increased again this month, but more “modestly” than the month prior, according to Moneyfactscompare. Rates for two and five-year fixes increased by 0.02 percent - the smallest monthly rise of the year.

Overall average two- and five-year fixed rates rose between the start of May and the start of June, to 5.93 percent and 5.50 percentrespectively. The average two-year fixed rate remains 0.43 percent higher than the five-year equivalent.

The average ‘revert to’ rate or Standard Variable Rate (SVR) remained at 8.18 percent, just shy of the highest recorded (8.19 percent) during November and December 2023. Meanwhile, the average two-year tracker variable mortgage fell to 5.94 percent.

Rachel Springall, a finance expert at Moneyfacts, commented: “Borrowers may feel disheartened to see another consecutive month of rises to the average two- and five-year fixed mortgage rates.

“However, both rose by a modest 0.02 percent, the smallest month-on-month rise this year. The incentive to fix for longer remains, with the average five-year fixed rate standing 0.43 percent lower than its two-year counterpart, and the incentive to remortgage is prevalent, as the average Standard Variable Rate (SVR) stands at 8.18 percent.

“Lenders spent the first few weeks of May repricing, in reaction to a volatile swap rate market, but the latter end of the month was more subdued, around the time the Government announced there would be a General Election in July.”

Despite the small uplift in rates, Ms Springall noted there was another rise in the overall product availability of residential mortgages, standing at its highest point in 16 years.

She added: “As lenders reviewed their ranges, which included repricing, launches and withdrawals, the moves led to the average shelf-life of a mortgage plummeting to 15 days, down from 28 days at the start of May. Year-on-year the overall availability of mortgages has risen by 1,662 deals, and within that pool of products, there are 156 more at 90 percent loan-to-value (LTV) and 124 more at 95 percent LTV.

“These rises are good news for borrowers who may be struggling to build a big enough deposit to secure a new deal. On the other end of the spectrum, there are just 98 more deals at 60 percent LTV, and month-on-month, there was a slight fall of 15 deals.”

Ms Springall said that consumers concerned about rising rates “would be wise” to seek advice from an independent broker to see if they can lock into a deal early, as some will let borrowers do this from three to six months in advance.

However, she noted: “There may well be some borrowers sitting on the fence, hoping the market gets a base rate cut this year, but they could still grab a lower rate deal than if they were to sit on their SVR without fixing, such as with a tracker deal.

“Those about to come off a five-year fixed mortgage will have to face the reality that rates are much higher now on an equivalent deal, 2.65 percent in fact, compared to June 2019, so consumers must ensure they can afford the higher repayments.”