- The BoE meets tomorrow to make its next decision over interest rates
Three more mortgage lenders have announced rate cuts across their mortgage deals.
Halifax has cut rates by up to 0.3 percentage points on remortgage deals, while home movers and first-time buyers will see rate reductions of up to 0.11 percentage points.
Mortgage lenders may be pre-empting an interest rate cut by the Bank of England tomorrow, with financial markets suggesting a 0.25 percentage point cut to 4.5 per cent is all but nailed on.
Andrew Montlake, managing director at mortgage broker Coreco told the news agency Newspage: ‘Where the Halifax goes other lenders tend to follow, so these cuts could trigger a chain reaction.
‘The markets have baked in a rate cut on Thursday.’
Halifax is now offering one of the cheapest five-year fixed rates for those remortgaging with at least 40 per cent equity in their homes.
Its 4.18 per cent five-year fix comes with a £999 fee. On a £200,000 mortgage being repaid over 25 years that would equate to £1,076 a month.
For those needing a mortgage to cover 75 per cent of their home’s value, Halifax is offering a 4.36 per cent rate, also with a £999 fee.
Hot on the heels of Halifax, HSBC and Clydesdale Bank have also announced rate cuts.
Clydesdale’s cuts, which took effect from today, saw a number of its two-year and five-year fixed rate mortgage deals lowered by up to 0.28 percentage points.
HSBC’s changes will take effect from tomorrow. Although it won’t reveal the rates until then, it has said it will be impacting a vast array of deals across both its residential and buy-to-let product range.
The latest swathe of rate cuts follows Barclays and Coventry Building Society, which both announced similar changes on Monday.
Jack Tutton, director at SJ Mortgages also thinks that the latest cuts could be a further sign that the Bank of England will vote to reduce the base rate tomorrow.
He also points out that Sonia swaps – the bank lending rates which influence the pricing of fixed rate mortgages – have fallen in recent weeks.
Since 16 January, five-year swaps have fallen to 4.17 per cent to 3.91 per cent and two-year swaps have dropped from 4.29 per cent to 4.05 per cent.
‘It has been widely reported that a cut in February has been on the cards for a while, and these cuts suggest that this is very much the case,’ said Tutton.
‘Swap rates have been reducing over the past couple of weeks and there is a big margin between what they are now versus a month ago, so more lenders will follow should this continue.’
