Homeowners to save hundreds of pounds a month as mortgage rates reduce
Released On 5th Sep 2024
Mortgage rates have reduced to the lowest levels since Kwasi Kwarteng’s ill-fated mini-budget in September 2022.
The majority of the UK’s largest mortgage lenders are now offering fixed-rate mortgage deals below 4 per cent. This follows on from the Bank of England’s recent decision to cut the base rate from 5.25 per cent to 5 per cent, coupled with stronger than expected inflation data announced last week.
The reductions by lenders will result in homeowners and potential buyers being hundreds of pounds better off each month.
In further good news for buyers, TSB has announced it is reducing rates by up to 0.25 per cent tomorrow, with HSBC also following suit.
Significantly, the rates which have grabbed the headlines have only previously been accessible to those with a deposit of at least 40 per cent. TSB has revealed it will make the largest reduction in rates to those with smaller deposits of between 10%-20%. For example, TSB will reduce five year fixed-rates for existing homeowners and first-time buyers by up to 0.25 per cent.
Lorraine Balcombe, Mortgage & Insurance Consultant at Albert Goodman Financial Planning, commented:
“Many homeowners have understandably postponed moves over the last two years as a result of significantly higher mortgage rates since the mini-budget, which led to the end of Liz Truss’s period as Prime Minister.
With the base rate already cut once – and further reductions anticipated before the end of the year – we are now seeing an uplift in enquiries from those looking to move home.
“HSBC’s decision to cut their mortgage rates was anticipated, as they follow their main high street competitors who have reduced rates in recent days. We are now seeing significant competition as lenders continue to reduce their rates below 4 per cent and fighting for mortgage business. This is great news for those looking to move or due to remortgage in the coming months.
As an independent, whole of market mortgage broker, we are always monitoring the latest rates on behalf of our clients. The cuts announced in recent days will see our clients save money every month, as we review their applications and move them on to cheaper rates as part of our broker service.”
