The race to be the first mortgage lender with a two-year fixed rate starting with a four is “heating up” following Virgin Money’s latest rate reduction.
Virgin Money has announced rate reductions including a 65 per cent LTV two-year fixed rate with a £1,295 fee launched at 5.05 per cent.
Dimora Mortgage director, Jamie Lennox, said “time will tell” which lender will be the first to take the leap to offer a sub-5 per cent two-year fix, but when it does happen it will be like “Black Friday come early for borrowers”.
The idea of a “Black Friday sale” was echoed by EHF Mortgages managing director, Justin Moy, who said: “We are definitely edging towards a Black Friday fire sale, if there has ever been such a thing for mortgages.
“Borrowers looking to celebrate sub-5 per cent two-year fixed rate deals need to hang up the bunting, as it looks like it will be time to celebrate very soon.”
A similar sentiment was shared by Charwin Private Clients director, Ranald Mitchell, who stated: “The bigger lenders are now slogging it out, with no prizes for second place.”
Mitchell described this kind of competition as “fantastic” for mortgage borrowers as it leads to lenders continuing to push pricing downwards.
“Who is going to be the first to offer a two-year fixed rate sub 5 per cent? They will certainly grab the headlines when they do. It’s coming,” he added.
Additionally, The Mortgage Co mortgage and protection adviser, Steven Hargreaves, said: “It looks like the next round of rate cuts is starting.
“Once one of the major lenders reduces rates, Halifax in this case, they all tend to follow like dominos.
“This is great news for first-time buyers and any customers who have deals that are due to come to an end soon.”
Hargreaves’s comments refer to Halifax’s rate cuts which were announced earlier this week (November 6) which included a two-year fixed rate purchase mortgage of 5.14 per cent up to 60 per cent loan-to-value with a fee of £999.
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