Lenders Santander and Barclays have both cut rates on their fixed mortgages.
Santander UK has reduced some of its mortgage rates by up to 0.29 per cent from today – the second time it has made such cuts in 10 days.
Meanwhile, Barclays has made reductions of up to 0.3 per cent on some of its products.
It follows a series of rate reductions by many of Britain’s high street banks in recent days and weeks.
Homeowners will be hoping that mortgage rates have now peaked – although they still face near-record payments.
Cheaper: Santander has cut the interest rates on some of its mortgages
Santander has reduced the interest rates on mortgages for new customers by between 0.05 per cent and 0.29 per cent. Its previous cuts to rates were made on 4 August.
Examples of rates that have been reduced include a 25 per cent deposit home purchase mortgage on a five-year fix, which has been reduced to 5.30 per cent from 5.59 per cent. The rate comes with a £999 fee.
A comparable deal with no fee has been reduced to 5.46 per cent, down from 5.75 per cent.
On two-year fixes, a 25 per cent deposit purchase mortgage is available at 6.22 per cent, down from 6.49 per cent, with no fee.
Those with a 15 per cent deposit can get a two-year fixed rate purchase mortgage with a £999 product fee at a rate of 6.09 per cent, down from 6.27 per cent, with a £999 fee.
And a two-year fixed rate purchase mortgage with a 10 per cent deposit and no fee is now priced at 6.57 per cent, down from 6.69 per cent.
However, while Santander is cutting rates for its new mortgage customers, it has come under fire for hiking prices for existing homeowners on its ‘follow-on’ rate, who now pay more than 8 per cent interest.
Santander said no rate changes had been made to product transfer mortgages, trackers or buy-to-let mortgages.
Product transfer is when an existing customer takes out another mortgage on the same home with the same lender.
Barclays has reduced mortgages in its new lending and ‘reward’ ranges by up to 0.3 per cent.
This includes a 15 per cent deposit mortgage on a two-year fix, which has been reduced from 6.96 per cent to 6.66 per cent. It is for existing customers doing a product transfer and has no fee.
A five-year fix for those with less than a 15 per cent deposit has been reduced from 7.03 per cent to 6.73 per cent. It is also fee-free and for product transfers.
Also today, specialist landlord mortgage lender Paragon has reduced its core two-year fixed rates by up to 0.45 per cent, with rates beginning from 4.85 per cent.
Banks have launched a mortgage price war in recent weeks that could bring some relief to embattled homeowners – with many high street names offering bigger cuts than Santander’s.
Halifax, the nation’s largest lender, reduced the cost of its mortgages by up to 0.71 percentage points late last week.
NatWest also reduced its fixed rates by up to 0.65 percentage points on both two and five-year deals.
Virgin Money also repriced a range of remortgage deals, including cutting one 20 per cent deposit loan to 5.6 per cent.
Kellie Steed, Uswitch mortgage expert, said: ‘Despite the base rate rising to 5.25 per cent, lenders seem to be continuing with fixed-rate reductions across the board for the time being.
‘Although we may now see a slowing of rate reduction announcements until lenders have digested the new inflation data, due to be released by ONS on 16 August.’
Where are mortgage rates heading next?
As of last week, the average five-year fixed mortgage rate was is 6.35 per cent and the average two-year fixed rate was 6.84 per cent, according to Moneyfacts.
The reason for the widespread rate cuts is that the cost for banks to borrow money to lend to homeowners, known as the ‘swap rate’, has finally stopped rising amid signs that inflation is starting to ease.
Fresh inflation figures are being announced on Wednesday this week.
However, stronger-than-expected UK economic growth has increased the chances of more interest rate rises.
This post first appeared on Dailymail.co.uk
