Mortgage rates fall despite BoE’s decision to hold

After the Bank of England voted by a very narrow margin to hold the base rate at its current level of 4.00% last week, lenders have continued to announce cuts to mortgage deals. Borrowers are now able to secure better interest rates across a range of mortgage products including those aimed at customers with low deposits.

Which lenders are cutting rates?

Several major lenders, including Nationwide, NatWest, Lloyds, HSBC, Santander and Barclays, have cut rates across their mortgage ranges in recent days. TSB Bank, Clydesdale Bank, The Cumberland and Skipton Building Society have also reduced some mortgage rates. While many mortgage products have seen their interest rates slashed, some rates have also increased. Nonetheless, the overall trend for mortgage rates in recent days has been downward.

Which mortgage deals are being cut?

Over the last few weeks, the best mortgage rates in the market for a 60% loan-to-value (LTV) 2-year fixed-rate mortgage have reduced from 3.80% to 3.67%. At the same time, the best rates for a 5-year fixed-rate mortgage have fallen from 3.96% to 3.84%. Moreover, it is not only the best rates that have improved; the current top five best rates for both 2-year and 5-year mortgages are now below the lowest rate equivalent rate from five weeks ago. Even this week, further cuts were made by TSB Bank on no-fee mortgage products, meaning that you can secure a 60% loan-to-value mortgage at 4.19% on a 2-year fixed-rate basis without paying a lender's fee.

How the best 2-year fixed-rate deals have fallen

Loan-to-value	7th October	11th November
60%	3.80%	3.67%
80%	3.98%	3.91%
90%	4.23%	4.13%

You will find the best rates regularly updated in our article, "Best mortgage rates in the UK", and you can search for the best rates based on your specific needs using our mortgage rate comparison tool.

Who can benefit from the rate cuts?

Reduced mortgage rates are likely to be available for a large cross-section of those looking to either purchase a property or remortgage their existing mortgage deal. Although lenders tend to favour specific groups of borrowers during rate cuts, the rate-cutting phase over the last few weeks has resulted in savings for borrowers with varying deposit levels, as well as those who may be approaching the end of a mortgage deal.

How to source and secure the best mortgage deals

With continued rumours surrounding the upcoming Budget announcement in November, borrowers may be inclined to wait until there is more clarification before applying for a mortgage. However, securing the best mortgage rate ahead of the event may safeguard against any adverse reaction in mortgage rates.

The best way to find the right mortgage deal is by speaking with a mortgage broker who can search the market for the best rates tailored to your specific needs. If you are moving home or buying your first home, you can typically lock in a rate for up to three months before completing the purchase. During this time, you can ask your mortgage broker to keep you abreast of any better deals that transpire. Similarly, those looking to remortgage can lock in a rate with their current lender by submitting a simple product transfer application up to six months prior to the expiration date of the existing mortgage deal. It is, however, wise to use the services of a mortgage broker to search the market for the best remortgage deals, as switching lenders could present savings if a better rate is available elsewhere.

If you do not have a mortgage broker, you can source one in your local area using the online directory for financial professionals, Vouchedfor*. Mortgage brokers are listed according to their services, alongside reviews from other mortgage customers. If you would prefer to consult a mortgage broker online or over the phone, you can contact Habito*. This leading online mortgage brokerage searches over 90 lenders’ mortgage deals on your behalf. Habito’s mortgage advisers make recommendations based on your circumstances and preferences, while their teams assist with the application process needed to secure your mortgage deal. Habito does not charge for its mortgage advice and guidance and is instead paid by the lender if you complete a mortgage using its services.

 

If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, Vouchedfor