In Focus: Home ownership  

Mortgage lenders cut interest rates despite BoE hike

Mortgage lenders cut interest rates despite BoE hike

Halifax has re-introduced a sweep of fixed-fee mortgage deals at lower rates as other lenders cut their rates by up to 0.45 percentage points, despite the Bank of England’s base rate rise to 3 per cent yesterday.

While the Bank of England's 0.75 percentage point rise was the single biggest hike in 33 years, brokers said it had already been priced into many fixed rate mortgage deals and that some deals had even higher rates priced in.

As a result, brokers predicted rates could fall.

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Today (November 4), Lloyds-owned Halifax - one of the largest lenders in the UK mortgage market - re-introduced a handful of £999 fixed-fee products at lower rates.

This saw it launch a two-year fixed rate mortgage with a 6.01 per cent interest rate, down from 6.19 per cent, and a five-year fixed rate mortgage with a 5.66 per cent interest rate, down from 5.74 per cent.

The lender has also extended end dates and complete by dates on deals by three months.

Clydesdale Bank, part of Virgin Money, has reduced rates by up to 0.25 per cent on two and five-year fixed deals with a £999, with rates now sitting at 5.44 per cent.

Its product transfer fee saver rates have been reduced up to 0.30 per cent, now available from 5.60 per cent.

Skipton Building Society has also cut rates on five-year deals, introducing rates reduced by up to 0.29 per cent, while YBS Commercial Mortgages has cut its rates by as much as 0.45 per cent.

Meanwhile, major lender Santander has updated its residential affordability calculator following the latest household expenditure figures published by the Office of National Statistics.

Mansfield-based broker Lewis Shaw said the cuts were “marginal admittedly” but “the right direction of travel”.

He added: “It looks like we’ll see most come down a touch. Swap rates seem to have found their level now.”

Swap rates are a leading indicator for mortgage interest rates. They rose rapidly following former chancellor Kwasi Kwarteng’s "mini" Budget, but have more recently levelled.

Currently, two-year rates are 4.3 per cent, down from 5 per cent at the beginning of October.

Mortgage interest rates began to fall again last week, with Santander and Accord announced rate cuts by up to 0.50 and 0.53 percentage points, respectively.