NEWS

Mortgage lenders have been steadily reducing rates in recent days, prompting speculation that the sluggish housing market could rebound this year and revive housing market.

Major rate cuts were announced today by NatWest, First Direct, TSB and MPowered Mortgages. This comes after HSBC's rate reduction yesterday, as well as earlier cuts from Halifax and Gen H.

Lloyds Bank, Leeds Building Society, Bluestone Mortgages, Hodge and LendInvest Mortgages have also lowered rates so far in 2023.

As a result, the average 5-year fixed mortgage rate has dropped from 5.53% to 5.46% in just one day, according to Moneyfacts data. Meanwhile, the average 2-year fixed rate has declined from 5.92% to 5.87%.

From tomorrow, there will be ten fixed rate deals below 4% available. The lowest rates target buyers with at least 40% equity or deposits.

HSBC is offering existing customers a 3.87% 5-year fixed rate at 60% loan-to-value with a £999 fee. New customers can get 3.94%.

NatWest is cutting fixed rates up to 0.42 percentage points across most products, with reductions for first-time buyers, home movers and remortgagers.

First Direct announced widespread cuts too, including two sub-4% deals - a 10-year and 5-year fix at 60% LTV.

TSB focused on 2-year fixes, now cheaper than 5-year ones. Its first-time buyer 2-year rates dropped up to 0.55 points, starting at 4.54% for biggest deposits. TSB also cut 2-year remortgage rates up to 0.4 points, now from 4.44% for those with 40% equity.

New lender MPowered has pushed rates down further, with 5-year fixes from 4.13%.

For smaller deposits, rates are also improving. Gen H has a 95% LTV mortgage at 4.95% with a £999 fee for buyers and remortgagers.

First Direct announced major reductions for lower deposits too. Its 5-year fixed standard mortgage for 90% LTV starts at 4.69%.

Brokers insist rates will keep falling, with some predicting 3.5% by June, as the Bank of England's base rate and inflation are expected to drop in 2024.

The unusually high activity at the end of last year during the typical seasonal lull has set the stage for a more robust housing market in 2024 and hopefully going forward.

Lower mortgage rates will improve affordability and demand. This will help not only existing homeowners looking to remortgage or move at better rates, but also first-time buyers who have previously struggled to enter the market.

Our mortgage broker partner, Sue Forrester from The Finance Family comments "The mortgage market has certainly started strongly in 2024. With lenders now keen to compete against each other again and more stability in the market, this has led to a downturn in the rates. It makes for a very busy and exciting start to the year for mortgage brokers like myself."

If you want to understand your options then Sue would be happy to have a free consultation with you.

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