TSB has discounted rates on selected two-year tracker and fixed rate mortgages for home movers, first-time buyers and remortgage customers.
The cheapest product is a fix at 1.14 per cent up to 60 per cent loan to value with a £995 product fee for remortgage customers.
The biggest rate cut of 0.25 of a percentage point has been made to loans for remortgagers. This includes a tracker between 60 per cent and 75 per cent which is now available at 1.69 per cent with no product fee.
The rate applicable to the fixed option is priced at 1.79 per cent with no product fee.
Highlights in the tracker mortgage range for home movers include a 0.10 percentage point reduction to loans at between 60 per cent and 75 per cent LTV to 1.69 per cent with no product fee. The lower rate option is now priced at 1.24 per cent with a £995 product fee.
At between 80 and 85 per cent LTV, the rates on two-year trackers have been lowered by 0.05 percentage point to 1.54 per cent with a £995 product or 2.04 per cent fee free.
The greatest reduction in the range for first time buyers has been made to a fix at between 80 and 90 per cent LTV. The rate has been reduced by 0.15 percentage point to 2.74 per cent.
Provider view
Roland McCormack, mortgage distribution director at TSB said: “Just a week after we launched our best ever five-year remortgage rate, we’re further helping borrowers by reducing rates across our two-year fixed rate mortgages and two-year tracker mortgages. This shows yet again how we are supporting homeowners to borrow well, whether you’re looking to get on the housing ladder or already have your own home.”
The news comes after recent announcements from TSB that it has introduced its best ever five-year remortgage rate, launched a dedicated mortgage range offering £750 cash-back, and scrapped Mortgage Application Fees across the entire product range.
Adviser view
Simon Webster, managing director at Kent based Facts & Figures: Chartered Financial Planners, said: “I have been hearing that TSB is pushing hard in the market at the moment. The fact that the lender has unveiled a host of rate reductions supports this point.
“Six months ago, I would have said short term trackers are the more attractive proposition given the uncertainty brought about by macro-economic events such as Brexit. Now, fixes are looking the better option because the rate difference between trackers and the fix equivalent is minimal. Also, base rates could fall in the very short term but could rise by the end of next year.
“I would say that if a tracker is 0.5 percentage point cheaper than its fixed equivalent then it could be the ideal solution. For borrowers who are at the edge of affordability, a low cost fix rate deal is probably their best option."
Charges
Ranges from £0 to £995
Verdict
Reductions to fixed-rates mortgages are commonplace in the mortgage marketplace, whereas discounts made to tracker products raises eyebrows.
TSB’s decision to lower rates across its range of two-year trackers could suggest that the lender foresees a hike in interest rates at some point in the near future. Recent history teaches us that it is difficult to second guess the direction in which base rates will go. For example, the widely forecast increase in interest rates in 2016 did not materialise. In fact, the Bank of England took the decision to cut base rates to 0.25 per cent anticipating turbulence in the UK economy.
