Mortgage rate prices have dipped below 5% and are expected to continue falling after the Bank of England held interest rates at 5.25 percent.
Mortgage rates have been declining for the last couple of months as the market reacted to better-than-expected inflation data.
Several lenders including Nationwide and NatWest have already announced cuts to their mortgage rates, with many lenders expected to announce more in the upcoming weeks.
NatWest announced reductions of up to 0.31 percentage points across its fixed residential and buy-to-let deals.
It will have five-year fixed-rate deals starting at 5.14 percent, however, there are cheaper options for Britons to consider.
Nationwide has just announced further mortgage rate cuts. It said: “From tomorrow, Friday 22 September, we’re reducing selected fixed rates by up to 0.31 percent.”
Their rates on five and ten-year fixed rates for first-time buyers and home movers will now start at 4.94 percent. The Building Society is also offering two-year fixed rates for home movers with rates starting below 5.5 percent.
As the base rate remains unchanged at 5.25 percent, “fixed rates should keep on getting cheaper.” This decision by the Bank of England brings an end to the longest period of rate rises in decades.
David Hollingworth, associate director at broker L&C Mortgages said: “Fixed rates should keep on getting cheaper. The very best rates have been slowly nudging down but positive inflation figures and the hold to base rate should add momentum to that trend.
“We could see further cuts feed through to the market quickly, which will be a boost for borrowers, giving them confidence that we are now at or very close to the peak.”
Ahead of the highly anticipated Bank of England rate decision today, TSB announced a selection of rate cuts, which brokers have said is yet more proof of the “growing rate war”.
TSB will make further reductions to selected residential products by up to 0.25 percent from September 22. With rates starting from 5.09 percent, this is more good news for new and existing borrowers.
State Bank of India has also launched a two-year fixed-rate deal for new buy-to-let customers at 3.9 percent as the mortgage price war continues to grow.
The deal, which requires a 50 percent cash deposit or equity, has a hefty five percent arrangement fee. But brokers believe it will be a mouth-watering option for many BTL investors.
Virgin Money also cut rates on several of its products, bringing its five-year fixed rates as low as 4.97 percent, following Yorkshire Building Society, which lowered its five-year fixed rate to 4.99 percent this week.
The last time that deals of this type priced below five percent were available was in June.
Lewis Shaw, founder of Mansfield-based Shaw Financial Services said: “Chances are we’ll see much more of this in the coming few weeks, and not before time, as consumers are worrying, especially with over half a million people set to move onto new rates before Christmas. This could be the present many have been hoping for.”
