Lenders are cutting aggressively ahead of the Budget. From tomorrow, Tuesday 18 November, Barclays is reducing rates on a selection of products in its Purchase range and some of the cuts are fairly significant — of up to 0.3%. Brokers said Skipton and Leeds have also joined the “Monday mayhem”.
At Barclays, a 4.65% 5-year fixed rate mortgage with no product fee at 90% loan-to-value (LTV) — maximum loan £640k — will decrease to 4.35%, while a 3.98% 5-year fixed rate mortgage with an £899 product fee at 60% LTV, will decrease to 3.82%. Additionally, a 4.21% 5-year fixed rate remortgage with no product fee at 75% LTV, will decrease to 4%.
Michelle Lawson, Director at Fareham-based Lawson Financial, said: “Barclays have made some juicy cuts to entice buyers today, with Leeds and Skipton also joining the Monday mayhem. This is a great boost for borrowers and an opportunity to lock something in ahead of the Budget.”
Harps Garcha, Director at London-based Brooklyns Financial, said the move is especially welcome given that wholesale money is going in the opposite direction: “Even though SWAP rates have gone up over the past week, we’ve seen lenders like Barclays, Skipton and Leeds cutting their mortgage rates, with some fairly chunky reductions for purchases.
“This happened on the same day Rightmove reported a pre-Budget drop in house prices, which makes it look like lenders are gearing up for a bit of a price war to boost activity in the market.
“Whether this actually works or whether buyers decide to wait until after the Budget is still unclear. But for anyone thinking about applying for a mortgage, these rate cuts are definitely worth taking advantage of while they are available.”
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, added: “Lenders are clearly feeling the lack of activity and energy in the market and are doing everything they can to get it moving.
“But many people are clearly sitting tight ahead of what is shaping up to be a grim Budget.”
Echoing that sentiment was Babek Ismayil, CEO at homebuying platform OneDome: “Demand has ebbed away as borrowers batten down the hatches ahead of this month’s fiscal announcement and lenders need business.
“They’re trying to light a fire under demand by bringing rates down, even if that means their margins take a hit. Either way, lenders doing this is good news for borrowers and now could represent a good window of opportunity.”
Photo by Declan Sun on Unsplash
