A NUMBER of big lenders are set to slash mortgage rates despite the Bank of England’s (BoE) recent base rate hike.
Nationwide, HSBC and TSB are poised to make reductions on their products from tomorrow.
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Nationwide Building Society is reducing some of its fixed-rate mortgages by up to 0.55%.
Meanwhile, HSBC is expected to cut rates on its residential mortgages, although the bank is yet to offer specific details.
Plus, TSB is slashing rates on selected five-year fixed mortgages by up to 0.40%, with rates starting from 5.44%.
Bear in mind, the above rates are representative and what you can get on a deal depends on your personal circumstances.
But they do act as an indicator of where lenders are heading with rates.
The recent rate changes come despite the BoE recently hiking its base rate from 5% to 5.25% in a bid to slow soaring inflation.
It is the fourteenth time in a row that the BoE has raised rates since December 2021.
Any rise in the base rate is usually echoed in mortgage rates.
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However, inflation in June stood at 7.9%, slowing from 8.7% in May, fuelling expectations the rate will not need to rise as high as previously thought.
Inflation figures for July are set to be announced on August 16, with the BoE forecasting the rate to slow to 6.8%.
Lenders have in turn started factoring this into some of their mortgage rates.
At the same time, swap rates, which underpin fixed mortgage rates, have stabilised amid expectations inflation is cooling.
Nationwide is making reductions of up to 0.45% across selected two, three and five-year fixed products from tomorrow.
It is also slashing mortgage rates on its two, three and five-year products for first-time buyers.
Meanwhile, for remortgage customers, it is making reductions of up to 0.35% across selected two, three and five-year fixed loans.
However, rates on its range of two-year tracker mortgages will increase by 0.25% after the recent base rate rise.
Tracker mortgages are different to fixed-rate mortgages in that they rise and fall in line with the BoE’s base rate.
Last week, Santander and Coventry Building Society also started hiking its tracker mortgages by up to 0.50%.
It comes as data from Moneyfacts reveals the average two and five-year fixed-rate mortgage today stands at 6.84% and 6.35% respectively – unchanged from yesterday.
Riz Malik, founder and director of R3 Mortgages, told website Newspage: “Many lenders repriced fixed-rate products downwards in the week before the base rate decision.
“Hopefully, this trend will continue.”
Meanwhile, Jamie Lennox, director at Dimora Mortgages, said the next inflation announcement from the Office for National Statistics (ONS) would be “key” in deciding whether fixed-rate mortgages continue to fall.
How to find the best mortgage rates
Getting the best rate on a mortgage depends on what’s on the market at any given time.
That said, there are a few ways you can land a good deal.
In most cases, the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio has changed this could also give you access to better rates than before.
Your loan-to-value ratio is the ratio of what you borrow on a mortgage against how much you paid as a deposit.
For example, if you get a £160,000 mortgage to buy a £200,000 home, the loan-to-value is 80%.
If your credit score improves or your salary goes up this can see you offered better mortgage rates too.
And if you’re nearing the end of a fixed deal soon it’s worth looking for a new one.
You can sometimes lock in current deals up to six months before your current deal ends, albeit usually with an early exit fee.
But, depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal.
Make sure you compare the costs first to figure out where you might save the most money.
Meanwhile, you can find the best deal using a mortgage comparison tool. This will show you what’s available out there.
Or, you could use a mortgage broker who can compare deals for you, but they will charge you for the service.
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