Other lenders are expected to follow suit as they compete to pick up business from scarce buyers
Nationwide today became the first major mortgage lender since the mini-Budget debacle last September to offer two year fixed rate deals below 5% in what was described as a “watershed moment” for the housing market.
The lender slashed 0.25% off its deals in the latest sign that the mortgage market is easing for borrowers. That reduced the interest rate on a two year fixed mortgage for existing customers looking to buy and with at least a 40% deposit from 5.24% to 4.99%.
Brokers welcomed the move the said other lenders were likely to follow suit in what has become a highly competitive market amid a lack of buyers.
Aaron Strutt, product and communications director at London brokers Trinity Financial, said: We now have two-, three-, five- and ten-year fixed rates available below five per cent which is good news and hopefully should bring a bit more confidence to the market.
“The Bank of England’s decision to hold the base rate has provided more stability, which has helped lower funding costs. We are in an unusual situation where many of the cheapest deals are much lower than the Bank of England base rate.
"Over the last week, NatWest and HSBC have lowered their rates twice, while other big providers like Halifax have also made rates more attractive. The lenders know the best way to shift their mortgages is to make their rates as competitively priced as possible.
“While it has taken quite some time for mortgage rates to come down, particularly since the mini-budget, they are now much more competitively priced than they were.
“Many lenders are offering cheaper rates to borrowers buying homes rather than remortgaging as they try to bring life back to the homebuying market. The has been a big drop in the number of people purchasing properties, while there is no shortage of people needing to remortgage.
“These sub-5% rates are certainly more appealing than many of the deals we have seen for quite some time.”
Original story as reported by The Standard can be found here.
