Fixed mortgage rates have been falling and now one of the UK largest lenders has announced significant price cuts.

NatWest (for Intermediaries), the broker lending arm of the big bank, has announced it will reduce the cost of its two and five year fixed rates.

For new borrowing, the bank is cutting selected two- and five-year mortgage deals by up to 0.47 percentage points and 0.54 percentage points respectively.

Its two-year fixed purchase product at 60% LTV with a £995 fee been cut from 5.87% to 5.4%. The fee-free alternative has dropped from 6.12% to 5.75%.

Remortgagors will see rate reductions of up to 0.55 percentage points and 0.5 percentage points on selected two- and five-year deals

And existing customers will benefit from similar rate cuts of up to 55 percentage points and 39 respectively.

Amit Patel, adviser at Trinity Finance, said: “Christmas is a time for giving and the early signs are that lenders are starting to give and that there is some light at the end of long dark tunnel.

“This will provide a much-needed boost to the budgets of households up and down the country and I expect other high street lenders to make similar announcements in the days and weeks ahead.”

Imran Hussain, director at Harmony Financial Services, added: “This is welcome news for many in the market looking to purchase their first home or even remortgage. To see rate reductions of this kind is fantastic and hopefully a sign of things to come in 2023. There’s a chance more lenders will follow suit and look to become more competitive as we head into the New Year.”

Bank of Ireland cuts rates

Bank of Ireland has also cut mortgage rates, including a five-year fixed deal at 4.9%, available up to 60% of the property’s value. This is down from 5.18%, and comes with a £1,495 fee and £250 cashback. The lender’s two-year fixed rate has been cut to 5.13% from 5.43%.

Sabrina Hall, mortgage adviser & protection adviser at Kind Financial Services, said: “This is such welcome news. My only concern is that if other lenders don’t follow suit, it could result in the rate disappearing.

“Bank of Ireland are an excellent lender however they are not ones for wanting huge volumes of business so if they get inundated with cases then they might withdraw the rate.”