Four of Britain’s biggest mortgage lenders have fuelled a home loan price war with the launch of deals under 4 percent.
Halifax and the Nationwide have followed NatWest and Santander in bringing down rates.
The falls are expected to fuel a surge in property sales and remortgages, while further reductions are predicted.
They come against the background of the Bank of England’s decision to cut the base rate by a quarter point to 5 percent.
At the same time, so-called swap rates, which set the interest rates finance giants lend to one another, have also been edging down.
To date, most of the market leading mortgage deals are only available to those with a big deposit of around 40 percent. However, there are hopes that cheaper home loans will soon be available to first time buyers with less to put down.
NatWest is reducing the rate on a five-year fix based on a 60 percent loan to value to 3.89 percent. It comes with a hefty fee of £1,495.
There is also a two-year fix at 4.05 percent but there is a punishing fee of £3,499.
Santander has cut rates. At the same time Halifax has announced rate reductions of up to 0.37 percent on 3 year remortgage products.
Nationwide is reducing selected fixed rates by up to 0.2 percentage points with the result its cheapest deal starts at 3.84 percent.
Its director of home, Henry Jordan, said: “We’re making further cuts across our fixed mortgage range in support of all segments of the market and to ensure that Nationwide continues to be front of mind for those looking to buy their first home, move to their next or who want to switch to a new deal.”
Tony Castle, Managing Director at PFG Mortgages, said: “Rates falling below 4 percent and continuing to decrease is a huge and much needed relief to not only homeowners but also aspiring buyers.”
Stephen Perkins, Managing Director at Yellow Brick Mortgages, said: “Lenders are hungry for business during the remainder of 2024 and borrowers should take note.
“With competition between lenders heating up, now is a fantastic time for borrowers to make their property dreams a reality.”
Andrew Montlake, Managing Director at Coreco, told Newspage: “After a relatively quiet first half of the year, lenders seem to be fighting for market share at present.”
Ben Perks, Managing Director at Orchard Financial Advisers, commented to say: “As people return from their summer holidays in the coming weeks, I expect the property market to really start to gather pace.”
Justin Moy, Managing Director at EHF Mortgages commented: “Fantastic to see a continued trend of rate cutting well into August, with two of the most prolific lenders helping borrowers with even better options.”
Katy Eatenton, Mortgage & Protection Specialist at Lifetime Wealth Management, said: “There is definitely a rate war looming. The start of the year was shaky, so lenders may be trying to get the business in before the year ends.”
