Major lenders lead repricing this week: Moneyfacts – Mortgage Strategy

Mortgage rates edged a little bit lower this week as several lenders made a series of selective rate cuts targeting certain borrowers.

A total of 19 lenders made changes this week, with 11 making net rate cuts, one made net rate increases and another lender made a mix of changes. A handful of lenders also made range, fee or end-date changes.

As a result, the Moneyfacts Average New Two-Year Fixed Mortgage Rate fell marginally from 5.61% to 5.60%, while the average new five-year fixed rate edged down from 5.64% to 5.63%.

As Adam French, head of consumer finance at Moneyfacts points out:

“The latest repricing was led by several major lenders. HSBC cut selected fixed rates by up to 20 basis points, while Leeds Building Society reduced selected rates by up to 18bps. Nationwide Building Society, Nottingham Building Society and Santander all cut selected fixed rates by up to 15bps, while Virgin Money reduced selected rates by up to 10bps.”

A few lenders also improved pricing for higher loan-to-value borrowers. Gen H reduced its fixed rates at 90% and 95% LTV by 15bps, while Newcastle Building Society launched a new five-year New Build Affordability Boost at 5.90% up to 95% LTV, with no fee and a free valuation.

However,  as French explains, the downward trend was not universal. Skipton Building Society reduced selected fixed rates by up to 22bps but increased some LTI Booster rates by up to 7bps and raised its two-year LTI Booster tracker by 10bps. Vernon Building Society also increased selected discounted variable rates by up to 43bps.

“Product innovation is still a running theme despite, or possibly due to, the volatility this year has brought. HSBC significantly increased its maximum advances for high-value mortgages, while also launching new high-value fixed rates from 5.01% and two-year trackers from 4.65%.”

French added: “Perenna replaced its existing range with new five- and 10-year fixed products, including dedicated new-build deals, while Kensington launched new two- and five-year fixes from 5.37% and 5.51% respectively. Foundation also refreshed some of its ranges, with rates starting from 5.99% for two years and 6.34% for five years.”

“For borrowers looking for a new mortgage, the latest reductions will be welcome news, particularly at selected LTV bands. However, volatility in the US bond market has pushed up the cost of borrowing for governments across the globe, including the UK, as inflation concerns, the Iran conflict and government debt all weigh on markets.

H concluded: “As a result, the costs that underpin mortgage pricing have risen again following a brief period of stability. It remains to be seen how it will all play out, but the bad news for borrowers is that it is likely to put some upward pressure on fixed mortgage rates in the coming weeks.”

Notable rate changes this week

AIB (NI) – Fixed rates reduced by up to 6bps.

Bank of Ireland Intermediaries – Fixed rates reduced by up to 10bps.

Bank of Ireland UK – Selected fixed rates reduced by up to 10bps.

Gen H – Fixed rates at 90% and 95% LTV reduced by 15bps.

HSBC – Selected fixed rates reduced by up to 20bps.

Leeds Building Society – Selected fixed rates reduced by up to 18bps.

Nationwide Building Society – Selected fixed rates reduced by up to 15bps.

Nottingham Building Society – Core and Life Happens fixed rates reduced by up to 15bps.

Santander – Selected fixed rates reduced by up to 15bps.

Skipton Building Society – Selected fixed rates reduced by up to 22bps, although some LTI Booster rates increased by up to 7bps; two-year LTI Booster tracker increased by 10bps.

Virgin Money – Selected fixed rates reduced by up to 10bps.

West Brom Building Society – Selected fixed rates reduced by up to 12bps.

Vernon Building Society – Selected discounted variable rates increased by up to 43bps.