{"id":115797,"title":"Mortgage rates reduced ahead of Bank of England announcement","publisher":"Share Talk","author":"sharetalk","published":"2024-08-01T10:34:00+00:00","modified":"2024-08-01T10:34:00+00:00","canonical_url":"https://www.share-talk.com/mortgage-rates-reduced-ahead-of-bank-of-england-announcement/","markdown_url":"https://www.share-talk.com/mortgage-rates-reduced-ahead-of-bank-of-england-announcement.md","json_url":"https://www.share-talk.com/mortgage-rates-reduced-ahead-of-bank-of-england-announcement.json","category":"B2B","categories":["B2B","Blogs","Business & Support Services","Technology","Technology, Media & Telecoms"],"tags":["fixed-rate","Halifax","homeowners","Lloyds Bank","mortgage rates","mortgages","Nationwide","NatWest","Santander"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2024/01/uk-house-750x406-1.jpg?fit=750%2C406&quality=89&ssl=1","format":"news","language":"en-GB","content":"High street lenders, including Halifax, NatWest, and Santander, have reduced their mortgage rates in anticipation of a potential Bank Rate cut.\n\nThe Bank of England has maintained interest rates at 5.25% for the past year, following 14 consecutive increases since December 2021, but is expected to announce a cut at midday on Thursday.\n\nHalifax has announced reductions in its fixed mortgage rates, effective Thursday, for both homeowners looking to remortgage and those purchasing a property.\n\nNatWest has also lowered rates across its fixed mortgage range by up to 0.15 percentage points, affecting both remortgage and purchase loans.\n\nSimilarly, Santander has reduced rates by up to 0.20 percentage points on its purchase, remortgage, and new build mortgages this week. It has also decreased rates on some of its buy-to-let loans.\n\nThese moves come after weeks of rate reductions by high street lenders aiming to attract business during a sluggish housing market. Last week, Nationwide became the first high-street lender since April to offer a deal below 4%.\n\nThe building society is now offering a five-year fixed rate of 3.99% to home buyers with a 40% deposit, although this rate is not available for remortgaging.\n\nThis decision followed similar rate cuts from other banks, including HSBC and Barclays.\n\nSwap rates, which are the main pricing mechanism for fixed-rate mortgages, have been gradually falling over the past month, allowing lenders to pass on savings to borrowers.\n\nAccording to Moneyfacts, the average two-year fixed residential mortgage rate is currently 5.77%, while the average five-year rate is 5.38%.\n\nAt the same time, the two-year swap rate is currently 4.25%, and the five-year swap rate is 3.77%, giving lenders more room to reduce rates further.\n\nWhen the Bank Rate is high, it affects mortgage and savings rates. The average two-year fixed mortgage rate was 2.34% in December 2021.\n\nRachel Springall, an analyst at Moneyfacts, noted: “The average rates on two- and five-year fixed-rate mortgages have both decreased month-on-month for the first time in six months. Waiting six months for rates to fall will no doubt require a lot of patience from borrowers who are counting down the days towards the end of their low-rate fixed deal.”\n\nNicholas Mendes of broker John Charcol suggested that if the Bank cuts its rate on Thursday, it could initiate a “downward Bank Rate cycle,” revitalizing market activity and leading to further declines in mortgage rates over the coming months.\n\nAround 1.6 million homeowners with fixed-rate deals expiring this year are hoping for a rate cut on Thursday, according to trade body UK Finance.\n\nHowever, Lloyds Bank CEO Charlie Nunn warned that rate cuts might not directly translate into more competitive mortgage deals. In the Bank’s half-year results, which showed a 14% overall profit decline, he noted that future Bank of England rate cuts were already factored into many current mortgage offers."}