The slashing of interest rates by some of the UK’s biggest mortgage lenders has led to a price war, despite expectations that the Bank of England will soon be moving its base rate off its historic low of 0.5%.
Halifax, Barclays, Nationwide, HSBC and Virgin Money are amongst the largest mortgage lenders to have made significant interest rate cuts, sparking a mortgage price war that is set to come despite plans for the Bank of England to move off their historic low of 0.5%.
Virgin Money are also launching a new range that allows customers to fix in for one year longer than the usual 5-year deal, thereby protecting themselves against rising interest rates.
All this is good news for borrowers!
Head of Communications at London and Country Mortgages, David Hollingsworth said that the slashing of interest rates was due to the continuing downward spiral of swap rates, the interest rates that lenders use to price loans for consumers.
Mr. Hollingsworth said, “Swap rates have been falling back and it seems the markets feel it’s going to be too soon for the base rate to rise before the end of this year now.”
“So you’ve got slightly reduced funding costs for lenders going into the autumn, when traditionally you see lenders trying to come back strongly into the market.”
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