High-street lenders and challenger banks continue to battle for borrowers’ attention, as another week of mortgage cuts hits the market.
Rates for borrowers dropped by 0.80% from September to October and brokers predicted a two-year fix deal will soon fall below 5%.
And they were proved right as Nationwide yesterday introduced a two-year fix at 4.99%.
Meanwhile NatWest, TSB and HSBC also cut their costs as the battle for borrower business blazes on.
NatWest slashed rates by as much as 0.57% on remortgage deals for new borrowers up to 60% loan to value (LTV), including its help to buy shared equity remortgage offer – down from 6.2% to 5.63%. This has no product fee, offers £500 cashback and is fixed for two years.
Its five-year fixes are down by 0.15% to 4.74% on its purchase deal at 60% LTV with a £1,495 fee. This deal compares favourably to the average five-year fixed residential mortgage rate of 5.83%, according to Moneyfacts’ figures.
TSB has reduced rates by up to 0.3% for deals on two and five-year fixed buy-to-let mortgages. Two-year fixes with the lender start at 5.39% at 60% LTV with a £1,995 fee. Rightmove’s data shows the average rate now stands at 5.80% today – a drop from 6.19% a year ago.
Borrowers can enjoy a 5.09% rate for a longer term, five-year fixed deal.
Challenger Gen H joins the high street cutters
TSB also added a two-year fixed product to its residential purchase range at 85% to 90% LTV, which includes a £995 fee at a rate of 5.64%.
HSBC joined its high street rivals by chipping away at its mortgage rates for movers and first-time buyers. This includes a two-year fix for residential borrowers at 60% LTV which was snipped by 0.1% to 5.14% and its five-year fix alternative is priced at 4.69% – a 0.05% drop.
The five-year fix for first-time buyers which comes with a £999 fee was clipped by the same amount and is available at 4.69%.
Meanwhile, challenger bank Gen H made its third cut it nine days on two and three-year fixes, reducing rates by up to 0.17% and 0.26% respectively.
‘Mortgage rates will continue to edge downwards’
Coventry Building Society also reduced rates on its five-year residential remortgages up to 65% LTV – now priced at 4.86% and includes a £999 fee. The mutual also dropped the two-year equivalent deal to 5.58%.
Rightmove’s mortgage expert Matt Smith said: “We’ve now seen the arrival of a sub-5%, five-year fixed rate mortgage in the important 85% loan-to-value bracket – the deposit size we see for many first-time buyers and home-movers. We can expect mortgage rates to continue to edge downwards”.
