In recent weeks lenders had been raising the price of mortgages as the prospect of a spring interest rate cut from the BoE faded
Three UK banks have announced cuts to the cost of fixed-rate mortgages, reversing some of the price rises seen in recent weeks.
Barclays Bank has announced it will lower the price of five-year fixed-rate deals for new borrowers and remortgagors by up to 0.45 percentage points from Friday. Its five-year fixed-rate for borrowers with a 40 per cent deposit is dropping from 4.47 per cent to 4.34 per cent.
At HSBC there will be cuts to two-, three- and five-year home loans, and the bank has withdrawn the 10-year fixed-rate mortgages it offers to remortgage customers.
TSB will also make changes on Friday, and cut two- and five-year deals for house purchases by up to 0.10 per cent.
In recent weeks lenders had been raising the price of mortgages as the prospect of a spring interest rate cut from the BoE faded.
Nonetheless, money market “swap rates” on which most fixed-rate deals are based have started to drop this week.
Mark Harris, chief executive of mortgage broker SPF Private Clients, noted: This latest round of mortgage rate cuts from some big lenders is great news for borrowers.
He said: They come on the back of a drop in swap rates, which underpin the pricing of fixed-rate mortgages, over the past week, he said.
These cuts should give other lenders confidence to make similar reductions, which will stimulate activity and provide a welcome boost for the market, he added.
Figures from the financial data firm Moneyfacts have shown little movement in mortgage rates in recent days. The latest data put the average two-year fixed residential mortgage rate at 5.92 per cent, unchanged from the day before, while the average five-year rate stayed at 5.49 per cent.
Despite the rate cuts, anyone remortgaging from a two-year fixed rate mortgage still faces a big rise in repayments: in May 2022 the average cost of one of those deals was 3.03 per cent.