Cuts on fixed rate mortgage took precedence this week, with some of the biggest lenders making reductions and only a couple of lenders increasing selected rates by small margins.
As Moneyfacts finance expert Rachel Springall points out these moves fuelled a drop to overall average rates. Week-on-week the average two- and five-year fixed rates fell by 0.05% and 0.04% to 5.39% and 5.22%, respectively.
The prominent brands to reduce selected fixed rates this week included TSB by up to 0.30%, NatWest and RBS by up to 0.28%, Halifax by up to 0.20% and Virgin Money by up to 0.07%.
Building societies made a few rate moves this week, those to cut included Nationwide Building Society by up to 0.33%; West Brom Building Society by up to 0.38%; Loughborough Building Society by up to 0.30%, Nottingham Building Society by up to 0.15%; Skipton Building Society by up to 0.16%; Leeds Building Society by up to 0.03%; Progressive Building Society by up to 0.59% but also increased selected rates by up to 0.11%. Rather than cut rates, Principality Building Society made increases of up to 0.42%.
Not to go unnoticed, a few more lenders moved to reduce rates such as Atom Bank by up to 0.20%, Gen H by up to 0.15% but also increased selected rates by 0.05% and The Co-operative Bank for Intermediaries by up to 0.82% but also increased selected rates by up to 0.06%. Lastly, MPowered Mortgages made increases of up to 0.05%.
Springall commented: “One of the eye-catching deals to hit the Moneyfacts Best Buy tables this week was a five-year fixed rate deal from Leeds Building Society, priced at 4.24% and available at 65% loan-to-value for second-time buyers and remortgage customers.
“It includes a free valuation for all and help toward costs for remortgage customers. This could be an attractive choice for those looking to minimise the upfront cost of their mortgage.”
She explained that although this week showed the mortgage market driven by a rate-cutting momentum, in recent days there has been a rise to swap rates.
“As a result, lenders with the lowest priced deals could pull or increase those deals to reflect a change in direction for future interest rate expectations. As the latest inflation announcement revealed a rise further above the 2% target, this makes it a lot less likely for aggressive base rate cuts this year, with some economists citing the next move not to be until May and perhaps only then again near the end of 2025.”
Springall concluded:”This will be disheartening news to borrowers who want rates to fall faster, particularly those who are due to come off a cheap fixed mortgage this year.”
