BARCLAYS, Accord and Leeds Building Society have cut their mortgage rates, with brokers warning borrowers that it’s the “last window of opportunity to lock in rates before the Budget”.
From tomorrow, Barclays will lower rates to as low as 3.73% on its 60% loan to value (LTV) two-year fixed mortgages. Other two-year and five-year rates from Barclays are being lowered by up to 0.13%.
Accord is reducing its residential rates on 80% and 85% LTV mortgages by up to 0.25%, while Leeds Building Society is cutting its residential rates by up to 0.11%.
Since inflation rose to 3.8% over the summer, mortgage rates have been edging up slightly, but over the past week or so, lenders have actively started reducing rates to ignite a slow market ahead of the Budget — and brokers have urged borrowers to lock in deals now.
Omer Mehmet, Managing Director at Trinity Finance, said: “Borrowers need to take note of the reductions we’re currently seeing. This could be a last window of opportunity before the Budget to lock into a good rate.
“If the bond markets don’t like what’s announced next month, rates could end up moving back in the wrong direction.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, added: “Yesterday, one major high street lender, TSB, cut rates twice in a week and these latest cuts will inject further momentum into the mortgage market.
“Though the direction of travel for rates remains uncertain, with inflation still far above the target, lenders are doing their best to get the market moving.”
Aaron Strutt, Product and Communications Director at London-based Trinity Financial, said: “It only takes one or two of the big lenders to lower their prices for other large and smaller mortgage providers to follow. If the base rate comes down next week or in December we may well have noticeably better rates to start the new year with.”
Stephen Perkins, Managing Director at Norwich-based Yellow Brick Mortgages, cautioned that next month’s Budget is likely to affect rates further.
He added: “These are some positive rate reductions across the market, no doubt designed to grab as much potential business whilst the sun is still shining. With the pending storm of the forthcoming Budget likely to reduce demand, now is the time for lenders to fill their boots.”
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, agreed: “The confidence of mortgage lenders has grown over the past week and more lenders are joining the party and reducing their rates. This may be the best opportunity for existing borrowers needing to renew in the next few months as rates may change after the Budget.”
Jack Tutton, Director at Fareham-based SJ Mortgages, said lenders are jostling for business.
He continued: “Just as the temperature starts to drop as winter approaches, mortgages lenders are sparking up the rate war ahead of the Budget at the end of next month. Lenders are making bold cuts to their rates to try and win business before the Budget and what storm that this might bring.
“With so many unknowns and the impact that this could have on financial markets, now would be a good time to review your mortgage options and strike while the iron is hot.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said it was welcome for borrowers.
He added: “More good news for mortgage borrowers as rates improve whilst lenders see business volumes struggle in this period up to the Budget.
“SWAP rates have fallen a little over the last week as the potential for base rate cuts improves, creating an ideal opportunity to grab a competitive deal for any borrower with a mortgage needing a renewal.”
Rohit Kohli, Director at Romsey-based The Mortgage Stop, got into the Halloween spirit with his response to the news.
He said: “It’s been a scary year for borrowers, but this week’s rate cuts are a real treat rather than another trick. With Barclays, Accord, and Leeds BS all slashing rates, lenders are showing they’re ready to lend again.
“Despite the gloomy backdrop of stubborn inflation and weak growth, the market’s been jolted back to life like Frankenstein’s monster as swap rates ease.
So did David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, who said: “Over the past two weeks lenders have been slashing rates like a scene from a horror movie. Hopefully that will make borrowers a little less spooked and bring some much needed life to the property market as we head toward Christmas.
“With the uncertainty of the upcoming Budget looming like a monster coming over a hill, borrowers would be wise to lock in these rates while they can.”
The Halloween metaphors sadly continued, with Michelle Lawson, Director at Fareham-based Lawson Financial, saying: “Some spooktacular rate cuts for borrowers with some decent reductions. Stability and confidence is returning to the mortgage market at last so we just need to hope that this isn’t all undone with the upcoming Budget.”
Ranald Mitchell, Director at Norwich-based Charwin Mortgages, said there was now a steady trend of lenders trimming pricing as swap rates ease and competition heats up ahead of the winter slowdown.
He continued: “While these aren’t seismic cuts, they signal intent. Lenders want to keep money moving and stimulate confidence among borrowers. For customers, it’s a welcome sign that stability is returning, and the market is gradually finding its rhythm again after a jittery few months.”
Photo by Edz Norton on Unsplash
