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Lenders continue to slash mortgage rates amid growing speculation that the Bank of England could cut interest rates for the first time in four years next week.
Earlier this week, Nationwide reintroduces sub-4% fixed rate mortgages The company has cut interest rates by up to 0.25 percentage points across its two-, three- and five-year fixed-rate products.
Now Barclays and TSB have become the latest lenders to cut fixed-rate deals, setting up an intensifying summer price war ahead of the Bank of England’s interest rate decision on Thursday 1 August.
Barclays has announced that it will cut interest rates by up to 0.1% on a wide range of home purchase and remortgage deals from today (26 July). The bank is offering a five-year fixed rate on home purchases at 4.04% (fees of £899) to borrowers with at least a 40% cash down payment (60% loan-to-value ratio), while Barclays Premier Banking customers can get the same deal at 4.03%.
Meanwhile, TSB has cut certain fixed interest rates for new and existing customers by up to 0.2 percentage points from today. The lender is offering two-year fixed rates for home purchases from 4.54% for a fee of £995, or 4.14% over five years, with the deals requiring at least a 40% cash down payment.
A number of other lenders have also cut borrowing rates this week, including Skipton, Empowered Mortgages and Atom Bank.
Nick Mendes, mortgage broker at John Charcol, said: “This week’s rate cuts are great news for borrowers and reflect strong competition in the market and confidence that the Bank of England’s base rate will soon be reduced.”
“This rate cut will represent significant savings for anyone looking to secure or refinance a mortgage, making this the perfect time to consider locking in a fixed rate.”
Confidence seems to be growing that the Bank of England will cut interest rates next week. A Reuters poll of economists found that a majority expect the Monetary Policy Committee to vote in favor of cutting the base rate from its current 15-year high of 5.25%. The survey, conducted July 18-24, found that 49 in 60 respondents, or more than 80%, expected a rate cut.
The recent fall in mortgage rates and speculation over the Bank of England’s next move coincides with a new report from the Institute for Fiscal Studies which claims that rising mortgage costs following 14 base rate hikes in the past two years have pushed 320,000 UK adults into poverty.