Santander began another round of price cuts on Friday (May 8) with cuts on deals for first-time buyers, remortgages, buy-to-let mortgages and more.
NatWest then announced on Monday that it would be making cuts of up to 0.21%, and Nationwide followed with news that it would cut interest rates from today by up to 0.36%, meaning the lowest rate is now 4.35%. Some of the biggest discounts were aimed at first-time buyers.
These developments, which also included Virgin making cuts of up to 0.26%, mean average mortgage rates have now fallen again.
According to Moneyfacts, the average two-year fixed mortgage rate is 5.75% today, down from 5.77% the day before. Five-year fixed interest rates also fell to 5.67% from 5.69% yesterday.
While this drop in interest rates is good news for borrowers looking for a new deal, experts are warning them against complacency by anticipating further cuts.
In fact, Moneyfacts analysis yesterday showed, in the wake of March’s “mortgage turmoil” when rates soared, that recent lender cuts meant rates had fallen slightly.
But given the uncertainty surrounding events in the Middle East, this trend was not guaranteed to continue.
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.ukSpeaking to the news agency, he said: “The momentum of last week has continued into this week, although there is no clear evidence that the conflict in the Middle East is approaching a resolution.
“Lenders appear to be more confident but people thinking about buying or remortgaging should not get complacent and assume interest rates will continue to fall because we have seen how quickly things can turn in recent months.”
Advice to anyone about to take out a mortgage is to seek advice from a broker and work to your own timelines rather than trying to predict what lenders might do.
Nouran Mustafa, Practice Manager and IFA at Ruxton fortune“If the deal is right for someone’s budget and circumstances, it may be sensible to secure it, especially when the lender allows the product to be switched before completion if prices improve,” he said, who also spoke to Newspage. “The market is moving in the right direction, but it is still sensitive to global shocks.”
“Rate cuts from Virgin, Nationwide, NatWest and Santander are encouraging, but until inflation and geopolitical risks subside, borrowers should view this as positive momentum rather than a guarantee that cheaper deals will continue.”
