Barclays and NatWest have cut mortgage rates in a significant shift, with experts attributing the move to the easing of tensions in the Iran war. The cuts, which range from 0.43 to 0.54 percentage points, are expected to increase competition in the mortgage market as summer approaches. Borrowers are advised to act quickly to take advantage of the new rates, as sentiment could change quickly if tensions escalate again.
Two major high street banks have today cut mortgage rates , in what brokers are hailing as a significant shift. Barclays has cut its rates across the board by up to 0.43 percentage points - with the highlights including a 5.85 per cent three-year fixed rate for those with a 5 per cent deposit reducing to 5.42 per cent, with a £899 fee.
This means someone with a £200,000 mortgage being repaid over 25 years would pay £1,219 a month with this deal, down from £1,270 a month yesterday. NatWest has cut its rates by up to 0.54 percentage points - with the highlight being its two-year tracker rate remortgage deal for those with just 20 per cent equity in their home (80 per cent loan-to-value).
Experts said the easing of tensions in the Iran war has helped - but they warned that sentiment could change very quickly if it escalates again. The easing of tensions in the Iran war has helped mortgage rates, but experts warned that sentiment could change very quickly if it escalates again. Swap rates have gone down and that was now feeding into mortgage rates, according to Justin Moy, managing director at EHF Mortgages.
However, he warned it's important for borrowers to act quickly just in case. Fixed rate mortgage pricing is largely based on Sonia swap rates - the inter-bank lending rate, which is based on future interest rate expectations. When Sonia swaps rise it often results in fixed mortgage rates going up, and vice versa when they fall.
Two year swaps are today at 4.05 per cent, down from 4.24 per cent a month ago, while five-year swaps are at 4.07 per cent, down from 4.22 per cent. The widespread cuts are set to increase competition in the mortgage market as summer approaches, bringing welcome news for those planning to move in the coming months. First-time buyers are jumping straight to houses, Zoopla data shows.
Borrowing costs have fallen over the past month, leading to the reductions released today, and there is growing optimism that this trend will continue with further rate cuts expected in the near future. Barclays also reduced its lowest two-year fix from 4.6 per cent to a market leading 4.39 per cent. The product, which comes with an £899 fee, is available to those buying with a 40 per cent deposit or more.
On a £200,000 mortgage being repaid over 25 years that would mean paying £1,099 a month. Other standout moves by Barclays includes a cut to its two-year fixed rate deal aimed at a household remortgaging with 25 per cent equity in their home (75 per cent loan to value). The rate, which was 4.9 per cent with a £999 product fee is now 4.73 per cent.
While Leeds Building Society currently offers a lower rate at 4.64 per cent, that comes with a much higher £1,499 fee. This means those remortgaging or buying a home face higher costs. That makes it even more important to search out the best possible rate for you and get good mortgage advice, whether you are a first-time buyer, home owner or buy-to-let landlord. This is Money's partner L&C can help you with its fee-free mortgage service.
To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C. This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit. You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes. If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder.
It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you. The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage.
Mortgage Rates Barclays Natwest Swap Rates Sonia Swap Rates Fixed Rate Mortgage Pricing Interest Rate Expectations Two Year Swaps Five Year Swaps Competition In The Mortgage Market Summer Approaches Borrowing Costs Rate Cuts First-Time Buyers Zoopla Data Best Possible Rate Good Mortgage Advice Fee-Free Mortgage Service Mortgage Calculator Online Mortgage Finder
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