Multiple major banks and building societies, including Halifax, HSBC, Barclays, Santander, and Nationwide have cut rates on their home loans already this week.
Swap rates, the rates at which banks lend to one another and a major determinant of mortgage pricing, have fallen in recent weeks, which gives lenders more room to decrease costs for households.
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Nick Mendes, mortgage technical manager at John Charcol, said: “I would expect further reductions from lenders throughout July.
“It is not a full-blown price war just yet, but the ingredients are there. Lenders are clearly jostling for position ahead of the summer spike in remortgaging and home moving.
The Bank of England Governor Andrew Bailey has appeared to confirm more cuts to the base rate were on the way later this year.
Lewis Shaw of Shaw Financial Services said: “It’s odds on that mortgage rates will continue to fall after the commentary of Andrew Bailey, highlighting further base rate cuts, coupled with a worsening economic outlook.
The average two year fixed rate is 5.07 per cent, according to Moneyfacts, whilst the average five year is 5.06 per cent.
Elliott Culley of Switch Mortgage Finance added: “Currently the forecasts look good to see further rate reductions in July.”
Andrew Bailey, the Governor of the Bank, said when speaking to CNBC on Tuesday: “I think that the path of interest rates will continue to be gradually downwards. I haven’t changed my mind on that.”
Interest rates currently sit at 4.25 per cent, but markets are increasingly pricing in the likelihood of two quarter-point cuts by the end of the year.
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