Competition in the mortgage market is intensifying, with several major lenders announcing fresh rate cuts as falling swap rates give banks greater scope to compete for borrowers.
Nationwide is leading the latest round of reductions, cutting selected fixed-rate mortgages by up to 0.19% and tracker products by up to 0.12% from today. Virgin Money has also reduced rates by up to 0.16% on selected two-year remortgage deals, while BM Solutions and Halifax are trimming rates by up to 0.15% across core ranges. Halifax is also introducing an additional 0.20% discount for Lloyds Premier customers.
The latest cuts come as one-to five-year SONIA swap rates have all fallen below 4%, with the two-year swap rate dropping to 3.913% and the five-year rate to 3.999%, compared with 4.159% and 4.176% respectively at the start of June.
The decline in funding costs is expected to support further competition between lenders, with the latest pricing moves suggesting there could be additional mortgage rate reductions if swap rates remain at current levels.
Nicholas Mendes, mortgage technical manger at John Charcol, said: “Six lenders repricing inside 24 hours tells you nobody wants to be left looking expensive going into the second half of the year, particularly with remortgage volumes picking up. Coventry is the outlier, nudging some residential fixed rates up while cutting BTL, which shows it’s not a uniform race to the bottom.
“For borrowers, the message is simple. Trying to time the absolute bottom of the market is impossible, and waiting for rates to fall further can easily cost more than it saves. Anyone remortgaging should secure a rate now, as most lenders will let you switch to a lower deal if pricing improves before completion, so you get the protection without losing the upside.
“For buyers, if you see a property, you like and it’s affordable, don’t delay. Holding off in the hope of a slightly cheaper rate risks missing out on the right home altogether, and that disappointment tends to outlast any small saving on the rate.”
