MAJOR lenders including Halifax and HSBC are slashing mortgage rates and some deals are dropping below 5%.
Banks and building societies are all making reductions as inflation, which stood at 6.7% in September, begins to slow.
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The slowdown has led to expectations that peak mortgage rates are now behind us.
Hikes in the Bank of England (BoE) base rate recently stalled after 14 rises in a row.
The central bank voted to hold rates steady at 5.25% for the second time earlier this month.
Some analysts are now predicting that rates could be a full point down to 4.25% by the end of next year.
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This is good news for mortgage rates, as a higher BoE base rate has a knock-on effect on home loans.
Lenders also often amend their mortgage rates in anticipation of what will happen to the BoE rate.
First Direct announced rate cuts of up to 0.4 percentage points from today.
Halifax also announced it will cut mortgage rates by up to 0.46 percentage points from tomorrow.
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It comes as financial information website Moneyfacts said that the average two-year fixed residential mortgage rate currently stands at 6.21%.
This is down from an average rate of 6.22% yesterday.
Meanwhile, the average five-year fixed residential mortgage rate today is 5.80%, down from an average rate of 5.81% yesterday.
Some analysts are predicting mortgage rates to fall further.
Ashley Thomas, director at London-based broker Magni Finance, forecasts them to fall below 4% within just months.
He said: “Lenders are getting more aggressive with rate cuts.
“I wouldn’t be surprised to see rates drop below 4% by the end of the year.
“The next inflation data will be crucial for mortgage lenders, and expect a lot of rates to reduce if inflation has dropped significantly.”
Below is a full list of banks and building societies slashing rates.
First Direct
First Direct announced rate cuts of up to 0.4 percentage points from today.
The bank said it is the most substantial round of mortgage rate drops it has made since February.
It has also launched two new mortgages for borrowers with a 5% deposit.
First Direct is now offering a rate as low as 4.74%, for new and existing customers looking for a five-year fixed-rate deal, with a 40% deposit.
Liam O’Hara, head of mortgages at First Direct, said: “After today’s rate reductions, several of our mortgage products are now priced under 5%.
“Our switcher rates have also been significantly reduced to ensure existing customers have competitive options when looking to re-mortgage.”
Virgin Money
Virgin Money has today slashed a number of its offers, including product transfers and remortgage deals, offering rates as low as 4.58%.
The lender has also launched two new deals which are available until November 20.
This includes a two-year deal for borrowers with a 10% deposit at 5.85% and a five-year deal at 5.16%.
Halifax
Halifax is cutting its mortgage rates by up to 0.46 percentage points from tomorrow.
This includes a five-year fix for borrowers with a 10% deposit which has been slashed by 0.24 percentage points to 4.97%.
Meanwhile, the lender is also dropping a five-year fix for borrowers with a 40% deposit by 0.20 percentage points to 4.53%.
Both of the deals have a £999 fee.
HSBC
HSBC UK is expected to make widespread reductions to its mortgage rates tomorrow.
However, the lender is yet to confirm the specific details.
Nationwide
Nationwide has already cut rates on a number of its mortgages, including reductions of up to 0.38 percentage points on two, three and five-year fixed rate deals for borrowers with a 10% deposit.
The building society’s lowest deal, a five-year fixed rate for borrowers with a 40% deposit and remortgaging, now stands at 4.64%.
Meanwhile, first-time buyer deals have been slashed by up to 0.31 percentage points.
Henry Jordan, director of home at Nationwide, said: “We’re making further rate cuts across our fixed rate mortgage range to ensure we continue to cement our position as one of the most competitive lenders in the market.
“Over the last three months, we have reduced rates eight times and, over that period, that has meant our rates have fallen by up to 1.39 percentage points as we look to maintain our support for potential and existing homeowners, as well as brokers, by offering attractively priced products.”
Metro
Metro Bank has slashed its rates by up to 0.7 percentage points, including on deals for new and existing customers.
Rates now start from 4.79% for customers looking for two-year fixes with a 4% fee.
Meanwhile, rates on five-year fixes start from 4.99% with a 4% fee.
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Charles Morley, director of mortgage distribution at Metro Bank, said: “These product enhancements have been driven by feedback from brokers as they seek to help as many customers as possible to achieve their property goals across both the residential and buy to let sectors.
“We expect a busy end of year moving into 2024 and we’re delighted to roll out these changes today and offer more choice to the market.”
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