Homeowners have been given a glimmer of hope, as a handful of banks and building societies cut mortgage rates last week.
Nationwide slashed rates on Friday by up to 0.35 percentage points after HSBC became the first major lender to reduce its deals on Wednesday, cutting its rates by 0.15 percentage points on average.
This marks the first reductions from high street banks in more than a month.
However, the average two-year fixed rate deal remains higher than at the beginning of the month. It rose from 6.39 per cent on July 1 to 6.83 per cent last Thursday, according to market monitor Moneyfactscompare. Two-year fixes peaked at an average of 6.86 per cent on Wednesday last week.
The Bank of England’s Monetary Policy Committee is due to make its next Base Rate decision on Thursday.
Glimmer of hope: Experts predict no longer expect interest rates to be raised as aggressively over the next year as inflation has started to ease
Experts predict another increase, but no longer expect the rate to be raised as aggressively over the next year as inflation has started to ease.
Nicholas Mendes of mortgage broker John Charcol says: ‘There is certainly an air of optimism, but it is important to set expectations.
‘Lenders will be stagnating reductions over the next few weeks to ensure that they do not quickly become market leading because this would result in an unmanageable influx of applications.’
One in four homeowners are overpaying their mortgages in a bid to pay off as much as possible before they lock into a higher rate, according to Barclays.
