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UK Lenders Adjust Fixed Mortgage Rates: Some Cuts Amid Selective Increases and Market Stability
Average mortgage rates in the UK have plateaued following recent reductions by several high street lenders. HSBC UK, Halifax Intermediaries, Santander, and TSB are among those cutting fixed-rate mortgage products this week, reflecting a fall in swap rates used to price loans.
Apr 16, 12:18 PM·3m read1 source
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UK mortgage rates have stabilized this week after several major lenders announced reductions on fixed-rate products. Average mortgage rates appear to have reached a plateau, with several high street lenders making reductions this week. Swap rates, which play a significant role in the price of mortgages, continue to be volatile, but while they are falling, lenders are taking the opportunity to pass that on to home buyers.
Santander said it is passing on a reduction in borrowing costs after a fall in swap rates, which are used by lenders to price loans.
The average two-year fixed homeowner mortgage rate on the market on Thursday morning was 5.88%, down from 5.89% on Wednesday. The average five-year fixed homeowner mortgage rate was 5.77%, unchanged from Wednesday. At the start of March, the average two-year fixed-rate mortgage was 4.83% and the average five-year fixed-rate deal was 4.95%.
Average mortgage rates have held steady since Easter, adding: “Rising mortgage rates seem to have plateaued for now. “Product numbers have also been steadily improving; 809 deals have returned to the market since it hit a low of 5,856 available products on 24 March.
“However, this is still 973 (12.7%) fewer than before the conflict in Iran began. “Money markets are now pricing for fewer base rate hikes than they were a few weeks ago and swap rates have fallen back towards 4% from highs of around 4.4%. “This has given several lenders, such as Santander, Atom Bank and Skipton Building Society, the headroom to make a few meaningful cuts over the last few days.
“However, mortgage pricing is driven more by expectations than current rates and borrowers are still exposed to sudden shifts.
HSBC UK is poised to make a wave of reductions on Friday, including for first-time buyers, home movers and people remortgaging. Halifax Intermediaries has also signalled plans for product changes from Friday, with rate decreases of up to 0.35 percentage points on fixed-rate products, while BM Solutions will also make some reductions.
