HSBC, Barclays and NatWest to chop house mortgage prices from tomorrow

Mortgage rates will fall again from tomorrow after three major high street banks all announced they will be slashing home loan costs. 

This morning, HSBC, NatWest and Barclays all confirmed a wave of rate cuts that will benefit home movers, first-time buyers and those remortgaging.

NatWest, which was first to announce cuts, said it will be lowering mortgage rates by up to 0.19 percentage points on selected two-year and five-year fixed products.

Most notably, it is cutting its lowest rate on a five-year fix from 3.89 per cent to 3.77 per cent, with a product fee of £1,495. 

HSBC is also cutting rates across its five-year and two-year fixed deals, although it will not reveal specific details until tomorrow. 

> When will interest rates fall?

Meanwhile, Barclays announced a number of rate cuts, which includes a sub-4 per cent fix aimed at people remortgaging and a 3.95 per cent deal for home buyers with a 25 per cent deposit.

Craig Fish, director at Lodestone Mortgages & Protection told the news agency, Newspage: ‘It’s only the first working day of the month but lenders are firing on all cylinders. 

‘There are good reductions from several lenders already this morning, and more lenders are likely to follow. 

‘As the nights grow darker, this is a bright sign that the property market is about to make a resurgence in time for the Autumn.’ 

What will this mean for borrowers?

From tomorrow, NatWest’s lowest five-year fix for someone buying with a 40 per cent deposit will be 3.77 per cent with a product fee of £1,495.

On a £200,000 mortgage being repaid over 25 years that would equate to £1,033 a month.

To put that in context, the average five-year fix across the whole of the market is currently 5.2 per cent, according to rates scrutineer, Moneyfacts.

Someone securing the average rate on a £200,000 mortgage being repaid over 25 years would pay £1,193 a month.

NatWest’s lowest two-year fix aimed at home buyers will fall to 4.14 per cent from tomorrow. It comes with a product fee of £1,495. 

This market leading rate is available to those moving home with a 40 per cent deposit and is streaks above the two-year fixed market average of 5.56 per cent.

Ranald Mitchell, director at Charwin Mortgages thinks NatWest’s latest wave of rate cuts will help reignite the housing market. 

‘NatWest’s latest rate cut is another clear signal that mortgage lenders are pulling out all the stops to reignite the housing market,’ said Mitchell.

‘Lenders are fiercely competing to offer the most attractive deals and there is now a real momentum building. 

‘This flurry of rate reductions is a positive step towards finding that sweet spot where consumer confidence rebounds, and the property market gets back on track. 

‘It’s an exciting time for potential buyers, affordability is improving, and the window of opportunity is wide open.’

From tomorrow NatWest and Barclays will also be offering sub 4 per cent five-year fixed rate remortgage deals for those with the largest amounts of equity.

NatWest’s lowest five-year fix will be 3.92 per cent with a £1,495 fee while Barclays is charging 3.93 per cent with a £999 fee.

Barclays is also offering a 4.07 per cent rate to those remortgaging with at least 25 per cent equity in their home.

As for home buyers, those with a 15 per cent deposit will be able to secure a 4.45 per cent rate from tomorrow with no fee. 

Rohit Kohli, director at The Mortgage Stop told the news agency, Newspage said: ‘The good news continues as Barclays make further reductions to their rates, especially in the 85 per cent loan-to-value bracket. 

‘The mood among lenders is clearly that these levels of rates are here to stay for a while longer and, as long as there are no shocks with inflation next week, then borrowers should act quickly. 

‘These ongoing cuts are quickly turning things into a sellers’ market and prices could start to edge up quickly.’

What next for mortgage rates? 

Mortgage rates have been falling in the expectation that interest rate cuts are coming. 

Since the start of July, the lowest five-year fixed rate mortgage has fallen from 4.28 per cent to 3.77 per cent.

Meanwhile, the lowest two-year fix has fallen from 4.68 per cent to 4.12 per cent during that time.

Nicholas Mendes, mortgage technical manager at broker John Charcol said: ‘Prior to today, competition among lenders had shown signs of easing slightly, as they looked to manage their pipelines and strike a balance between winning business and maintaining service levels.

‘The Bank of England is likely to hold rates this month, even as the Federal Reserve is expected to make a reduction. 

‘With inflation expected to remain slightly above their comfort level, the committee will likely adopt a wait-and-see approach, recognising that the impact of the previous reduction on inflation will not be immediate.

‘While rates are projected to fall later this year to around 4.75 per cent, a more significant reduction to 4 per cent may not occur until 2025.

‘Despite the likely hold this month, we can expect ongoing adjustments and a narrowing of fixed rates between purchase and remortgaging deals. 

‘Additionally, building societies and smaller high street lenders may decrease their rates as major lenders ease their competitive behaviour from recent weeks.’