he recent easing in mortgage rates shows no sign of slowing, as HSBC and NatWest both announced a range of interest rate cuts only hours apart, while brokers predicted the rest of the “Big Six” could soon follow suit.
This morning, HSBC revealed that it it will cut its mortgage rates from Tuesday, 5 September, across a range of its most popular products.
Just hours later, NatWest followed with cuts of its own of up to 0.35 percentage points for fixed-rate loans and 0.55 percentage points for trackers.
The UK’s top lenders have now been cutting mortgage rates for six weeks, after they skyrocketed to record highs in mid-July amid fears the Bank of England would raise its own interest rates to levels not seen this century.
Lewis Shaw, owner and mortgage expert at Shaw Financial Services, said more cuts from the other four members of the “big six” – Lloyds Banking Group, Nationwide, Santander and Barclays.
“With NatWest following hot on the heels of HSBC in announcing new rate reductions, there’s every chance we could see the remaining big four come to the party this week too,” he said.
Nationwide lowered its rates last Thursday, while the other three had all done so within the previous two weeks. But Steven Morris, advising director at Advantage Financial Solutions ltd, said that Halifax in particular would be unlikely to shy away from a second cut in quick succession.
“Whilst the Lloyds Banking Group only repriced last week, it is only a matter of time before their sub-divisions such as Halifax do so again to keep up with the Joneses,” he said.
Justin Moy, managing director of Essex-based EHF Mortgages, expressed a similar sentiment.
“I am sure others will follow the lead from HSBC and NatWest later this week,” he said.
Shaw added that, alongside lower Bank of England rate expectations, lenders were likely making cuts because they have seen low demand.
“It would appear that lenders are struggling to get new business, and the rate tap is the only tool they can turn to,” he said.
Last week, HSBC launched its first 40-year mortgages.