Home buyers have been offered a pre-Christmas boost with two major lenders cutting the cost of mortgages. Both Barclays and TSB have cut interest rates on new deals with rivals expected to follow suit in the coming days fueling hopes of a return of sub-4 per cent home loans.
The falls come as concerns about the impact of the Budget on inflation and interest rates begins to subside. So-called swap rates, which are the interest rates charged by financial institutions to lend to one another, have fallen back in recent days, which gives banks and building societies room to reduce the cost of new deals.
The positive news came at the same time as finance industry experts are predicting a home sales boom in the coming weeks as buyers attempt to avoid a rise in stamp duty from April 1.
New five-year fixed rate deals offered by Barclays have been reduced by a modest 0.14 of a percentage point, while TSB has made cuts of up to 0.4 percent.
Simon Bridgland, Director at Release Freedom, said: “Borrowers could be settling down with a bucket of popcorn this week as TSB are the second lender to wade into battle today with some cinematic reductions. It feels like sub-4 percent rates are looming on the horizon.”
Iain Swatton, Director at Exemplar Financial Services, told Newspage: “With lenders starting to unwrap festive treats for borrowers, competition in the market is heating up like a glass of mulled wine.
“These reductions are a welcome gift for buyers and those remortgaging, especially with affordability pressures still looming large. Let’s see if other lenders join the festivities and spread more cheer as we head into the holiday season.”
Ben Perks, Managing Director at Orchard Financial Advisers, said the long wait for mortgage cuts is finally over: “Lenders are coming out swinging as they fight for business in the final few weeks of 2024. Great news for borrowers and brokers alike,” he said.
David Stirling, Independent Financial Advisor at Mint Mortgages & Protection, said: “After weeks of eyeballing each other post-Budget, lenders are finally entering the arena to hopefully see out 2024 in truly gladiatorial style.”
Justin Moy, Managing Director at EHF Mortgages commented: “On a cold day, another High Street lender is warming the hands of mortgage borrowers with significant improvements to a number of their fixed rate deals.
“Whilst the market has cooled since the Budget in October, this is the second set of rate cuts this week so far, and with others likely to join in this week, we could see some pressure on those sub-4% deals before the year is out.”
