Who can forget Kwasi Kwarteng’s mini-budget on 23 September last year which unleashed chaos in the financial markets and helped push the price of many new fixed home loan deals above 6%!
The Bank of England hiked its base rate for the tenth time in a row to 4% in January in a bid to tackle inflation. And although a rise in the base rate is usually passed on to consumers, lenders are dropping interest rates instead.
Lender Price War Takes Shape
HSBC has announced that it is offering those remortgaging a five-year fixed deal at 3.99% to 60% LTV with a £999 fee. It is the first time since September 2022 that a five-year fixed-rate mortgage has been offered by HSBC at a rate below 4%. And this news comes only days after Lloyds Bank and Virgin Money slashed their 10-year mortgage to 3.99%.
This is great news for home buyers and mortgage holders looking to refinance, particularly if we consider that the average five-year fixed-rate mortgage on the market at the start of January was 5.63%.
Many economists now expect to see more lenders following HSBC. With many predicting that a new lender price war is just getting started.
How we can help
The competition in the fixed-rate market is really heating up with all the large lenders wanting to be the best-priced. This is in stark contrast to the Bank of England base rate which has risen for the 10th consecutive time to 4%.
This lender price war might just have come at the right time as the lower rates are attracting people back to the property market, which in turn should see property prices stabilise.
If you are looking to remortgage or have a fixed rate coming to an end soon, this is a good time to speak to us, we will be able to assess your circumstances and give you a clear idea of how you should proceed.
Get in touch with our expert mortgage brokers at 020 3645 4322 or request a call back.