Lenders reducing rates faster than expected

Rightmove

The reductions come in the midst of speculation that on Thursday the BoE’s Monetary Policy Committee (MPC) will cut official base rate

Rightmove says the scale of rate cuts being announced by lenders – including the first sub-4% mortgage in many months – has surprised the market and analysts alike.

The reductions come in the midst of speculation that on Thursday the BoE’s Monetary Policy Committee (MPC) will cut official base rate; and if it does not happen this week, Rightmove believes September is a sure bet.

Matt Smith, Rightmove’s mortgage expert, says: We have seen average mortgage rates decline at a pace not seen for a while this week, faster than many expected as lender competition hots up.

The first sub 4% rate for those with larger deposits and prepared to pay a higher fee is the headline-grabber, but we have also seen some notable declines in rates in other loan-to-value (LTV) brackets which should benefit more mass-market movers. It is interesting to see this competition for business increase even before the interest rate decision, he says.

Though there is still only about a 50% probability the base rate will be cut, if the current positive market sentiment continues, we could see further mortgage rate cuts, he adds.

And Gary Howorth, sales director at the estate agency Chestertons, says: To some, Nationwide’s decision to reduce its rates may come as a surprise as the likelihood of the BoE reducing interest rates next month remains uncertain.

Nationwide’s new mortgage products indicate the beginning of more positive market conditions for house hunters but also for existing homeowners looking to re-mortgage. We have already seen buyer activity rise after the General Election and expect the lower rates to boost buyer confidence further, he adds.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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