More lenders have announced mortgage rate changes in the wake of the base rate cut to 4% last week, with brokers saying they “are looking positive with their pricing right now”.
Some lenders have announced small reductions across the bulk of their fixed rate deals, with lenders such as NatWest and Coventry Building Society improving their prices across all major price points.
NatWest, for example, is offering first-time buyers a 2-year fixed rate at 85% Loan to Value at 4.04%, with a £995 fee — and a 2-year fixed remortgage rate at 3.82% at 60% LTV, with a £995 fee.
Meanwhile, Skipton Building Society and Santander have announced a combination of rate cuts and increases, as they look to ‘detune’ higher LTV products and make them more expensive.
Additionally, data from Moneyfacts shows the average mortgage rate fell to 5.04%, down from 5.11% month-on-month. It is down from 5.65% since August 2024, and lower than 6.52% in August 2023.
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said: “It’s perhaps too early to see if these rate change decisions were made before or after the base rate cut announcement last week. However, in the main lenders are looking positive with their pricing right now.
“Some borrowers, typically homemovers with smaller deposits, may see their rates slightly increase with a few key lenders, probably to manage workflow over the summer months more than due to swap rate pricing, but the latter needs careful scrutiny given that the Bank of England has already suggested further cuts are off the agenda for some time.”
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, added: “It’s encouraging to see some rate reductions following last week’s base rate cut, which was delivered by only a narrow margin of one vote. This may also explain why we have a mixed bag of changes as lenders are unsure about the direction of travel at the moment.
“While some lenders are taking their foot off the gas, others are looking to take on more business and gearing up for the busy autumn period.”
Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management, described the mortgage market is “lively”: “We’ve got a lively mortgage market at present. Overall, the rate cuts emerging are good news for borrowers if they have access to the whole of the market. Shopping around and taking professional advice could make a big difference.”
Craig Fish, Director at London-based Lodestone, also welcomed the cuts but reiterated that they have nothing to do with the base rate: “It’s good to see that lenders are continuing to support borrowers where possible by reducing rates and tweaking criteria, but these changes are nothing to do with the base rate cut.
“Lenders tweak their rates on and off throughout the year, and in many cases this is to manage workflow and balance their lending book to ensure that they don’t have too many clients borrowing at certain levels. It’s just more noticeable and in your face when it coincides with the base rate decision, hence the public’s continued confusion about the fact that the base rate affects mortgage rates.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, said competition could heat up as we enter the busy autumn period: “A lot of topsy turvy rate movements from lenders this week, which is hardly surprising given swaps have risen slightly following the Bank of England rate cut. A lot of this will be fine tuning rates at different loan-to-values and working on the banks’ competitive edges in each borrower type they wish to attract.
“Santander, for example, have overnight increased their 95% LTV first-time buyer product with no fees from 4.76% to 4.81%: not a seismic shift, but enough to push them below HSBC on sourcing and perhaps temper applications to a manageable level. We can expect to see more tinkering with rates as lenders eyeball each other closely through the end of summer. As the rush to meet their annual targets sweeps in, this may create another flurry of competition.”
