‘Promising trend’ of fixed rate cuts continues: Moneyfacts

The ‘promising trend’ of lenders cutting selected fixed rates continued this week – and more reductions could be on the way, according to Moneyfacts.

Lloyds Bank and Halifax reduced rates by up to 0.24%, Nationwide by up to 0.15%, TSB by up to 0.30% and Barclays by up to 0.15%.

Many building societies also followed suit.

Both Newcastle Building Society and Coventry Building Society cut rates by up to 0.45%, while Nottingham Building Society by up to 0.20%,

Other notable reductions came from Leek Building Society (up to 0.20%), Skipton Building Society (by up to 0.12%) and Leeds Building Society (by up to 0.15%).

MPowered mortgages also moved to reduce its selected two- and three-year fixed rates by up to 0.05% as well as launching a few new fixed rate deals onto the market.

Overall, for two-year fixed across all LTVs, the average rate has dropped from 6.73% on 25 August to 6.7% on 1 September. 

Two-year fixed rates at 95% LTV have fallen from 6.95% to 6.91%, while a two-year fixed at 85% LTV has reduced from 6.81% to 6.79% over the past week.  

Meanwhile, the average rate for a two-year fix at 75% LTV has fallen by 0.03% from 6.61% to 6.58%. 

For a five-year fixed at 90% LTV the average rate has decreased from 6.07% to 6.04%; while a five-year fix at 80% LTV has decreased from 6.12% to 6.09%. 

Those taking on a five-year fix at 70% LTV, will now, on average, pay 6.47%  – down from 6.48%.

Moneyfacts finance expert Rachel Springall says: “The mortgage market was awash with similar fixed rate activity this week, as cuts took precedence.

“As may be expected, the reductions have fuelled a fall to the overall average two- and five-year fixed mortgage rates.”

Progressive BS, Hinckley & Rugby BS, Darlington BS, Coventry BS, Cambridge BS and Leeds BS all increased their standard variable rates this week by 0.25%.

There were other lenders deciding to pass on more or less than 0.25% including Newcastle Building Society, which added 1% onto its standard revert rate.

Springall adds: “As a new month begins, it is not too surprising to see several lenders increase their revert rates, which is why it’s imperative that borrowers keep a close eye on their repayments if they are sitting on a variable rate deal.

“The fixed rate mortgage reductions this week are a promising trend, and more cuts could take place, particularly if SWAP rates fall further.

“Those borrowers who are still locked into a low fixed rate mortgage would be wise to overpay if they can, but for those coming off a deal its vital they speak to their lender and seek independent advice if they struggle to make repayments.”