Barclays and HSBC set to unleash mortgage interest rate cuts within hours
The reductions follow a number of small cuts by other lenders in recent days, such as Halifax, Santander and NatWest.
Andrew Bailey explains decision to hold interest rates at 5.25%
Barclays and HSBC have both announced rate cuts that will come into effect tomorrow.
For example, a five year fix with a 75 percent mortgage is coming down from 4.95 percent to 4.68 percent at Barclays.
And the bank is cutting a two year fix – with a £999 product fee – from 4.9 percent to 4.75 percent, while HSBC will announce its changes tomorrow.
The reductions follow a number of small cuts by other lenders in recent days, such as Halifax, Santander and NatWest.
They reflect expectations that the Bank of England will cut the base rate from the current 16 year high of 5.25 percent in August. At the same time, the so-called SWAP rates, which are the interest rates financial institutions charge eachother, have shown small falls.
Brokers welcomed the reductions and predicted house sales will pick up in the second half of the year.
Riz Malik, Director at R3 Mortgages, told Newspage: “Things are looking better for the UK mortgage market and with only a few weeks until the next base rate decision, borrowers could be hanging out the bunting this time next month."
Bob Singh, founder at Chess Mortgages, said: “The markets are factoring in the next base rate cut already so things are looking rosy.”
Managing director at Yellow Brick Mortgages, Stephen Perkins, said: "Two more high street banks are throwing their hat into the ring for cheapest mortgage rates, hoping borrowers vote for them as their lender of choice.
“HSBC and Barclays both announcing rate reductions for Friday following Santander, Natwest and Halifax earlier in the week, is starting to give the mortgage market real momentum.”
Emma Jones, Managing Director at Whenthebanksaysno.co.uk, said she expects other lenders to follow suit, adding: “All of these cuts are causing a chain reaction.”
Rohit Kohli, Director at The Mortgage Stop, said: “With thousands of homeowners due to come out of their fixed rates over the summer as their ultra-low 5-year rates secured in 2019 end, this will bring some relief to those stressed about how they were going to manage the increase.
“They will still face a jump in monthly payments but for someone with a mortgage of £250,000 and 25 years left to pay who has at least 25 percent equity in their home then the reductions over the previous couple of weeks have the potential to save them around £700 a year."
