Swap rates, which determine the pricing of mortgages, have fallen and brokers expect lenders to cut mortgage rates further in the coming weeks.
Matt Smith, Rightmove’s mortgage expert, says: “It looks like lenders are likely to give early 2024 movers the belated Christmas present of lower mortgage rates. After the reduction in swap rates we saw before the holidays, this is now starting to filter through to mortgage rates now that the festivities are over and the working year has begun.
The latest batch of reductions actually started just before Christmas with the lender Generation Home releasing a five year deal at 3.94 per cent – the first in recent times to fall below the psychologically-important four per cent level.
Since Tuesday, many others have followed suit.
Halifax, the country’s largest mortgage lender, slashed its two-year remortgage rate by 0.83 per cent. Other lenders under Lloyds Banking Group, including Scottish Widows and BM Solutions, also made cuts. Leeds Building Society lowered rates on 90 deals by as much as 0.49 per cent and HSBC yesterday announced its five-year fixed rate for remortgage customers with a headline rate of 3.94 per cent for those borrowing up to 60% of the property value.
L&C Mortgages associate director David Hollingworth says: “These cuts are just the latest salvo in an increasingly fast-moving market. These rates are offering some of the lowest rates since the spike in rates last summer. These cuts follow hot on the heels of New Year improvements by Halifax and others will be bound to follow suit. We thought the New Year would start with a bang and that’s proving to be the case.”
Banking trade body UK Finance projected last month that gross mortgage lending would fall some five per cent this year to £215 billion after collapsing 28 per cent to £226 billion in 2023.
Original article from Letting Agent Today
https://www.lettingagenttoday.co.uk/breaking-news/2024/1/will-tumbling-mortgage-rates-turn-tenants-into-buyers
