UK mortgage lenders are reducing rates
As summer draws to a close in the UK, there’s good news on the horizon for prospective homebuyers, property investors, and those looking to restructure their existing mortgages. Several major UK mortgage lenders have announced rate reductions and new competitive product introductions, providing a welcome opportunity for borrowers to secure more affordable financing after months of unprecedented rate increase. However, is it all as rosy and positive as the lenders are making it out to be? Or is it revealing some serious overreacting in the past on the lenders part? These newly introduced rate cuts came into effect at the end of August and the beginning of September 2023, potentially making homeownership dreams a bit more attainable for many. Here is a roundup of some of the changes that our brokers have been made aware of so far.
Nationwide – Leading the Charge For UK Mortgage Lenders
Leading the charge in this wave of rate reductions is Nationwide, one of the UK’s largest and most well known high street mortgage lenders. Starting on the 1st of September 2023, Nationwide has lowered selected fixed and tracker rates by up to 0.15%. This rate cut includes various product ranges, including new business, switcher products, additional borrowing, and existing customers moving home. These reductions could translate into significant savings for borrowers, especially those considering a move or looking to switch their mortgage to Nationwide. However, to get a full idea of what these new rates could look like for you, please feel free to give our advisors a call at Oportfolio today.
Accord Mortgages – A Timely Adjustment
Perhaps not as well known on the high street UK mortgage lenders, but certainly a big name playing in the mortgage market, Accord, a subsidiary of Yorkshire Building Society, are set to implement changes to their residential product transfer range on Tuesday the 5th of September2023. The current product range will be withdrawn at 8 pm today (4th of September), and the new range will be available from 8 am tomorrow (5th). Furthermore, all fixed rates are being reduced by a significant 0.20%. For further information on the specific rates available, call our team or drop us an email so that we can run through everything with you in more detail.
Halifax – Anticipating Reductions
Halifax bank has announced upcoming rate reductions but has not yet revealed specific details regarding the extent of these reductions. Starting from the 5th of September 2023 too, homebuyer products, including those aimed at first-time buyers, new build home mortgages, large mortgage loans, and affordable housing (Shared Equity/Shared Ownership), will see their rates reduced on 5-year fixed-rate products. Halifax’s decision to lower rates in these key segments is significant as typically these borrowers and loan types have a higher risk factor and a popular big name player like Halifax showing some confidence in the market is great to see.
Coventry – Offering Somewhat Competitive Rates
Coventry Building Society has also joined the rate reduction trend. The lender has lowered rates across various product offerings, making homeownership more affordable for its customers. Among the highlights of the new product range are the residential 2-year fixed rate at 5.90% at 65% Loan-to-Value (35% deposit or equity) with a £999 product fee and a buy-to-let 5-year fixed product at 5.97% at 75% Loan-to-Value (25% deposit or equity) with no associated fees. Borrowers interested in Coventry’s product reductions can gain more insights by speaking with mortgage advisors at Oportfolio Mortgages.
Leeds Building Society – Comprehensive Changes
Leeds Building Society is making significant changes to its product line-up and launching new offerings. They have reduced selected standard residential and shared ownership fixed rates by up to 0.25%. Additionally, new five-year residential fixed rates at 75-85% LTV are now available too. Product end dates are being extended across the buy-to-let (excluding Limited Company) and affordable housing product ranges to November of the relevant year. Selected buy-to-let and portfolio buy-to-let fixed rate mortgage products are also being reduced by up to 0.15%.
For existing Leeds Building Society borrowers, the news is even better, with selected residential and shared ownership fixed rates being reduced by up to 0.35%. Product end dates in the buy-to-let (excluding Limited Company) and affordable housing segments are also extended to November of the relevant year, with selected buy-to-let and portfolio buy-to-let fixed rates reduced by up to 0.30%. These changes offer existing customers more of a chance to benefit from more favourable terms and rates.
Are These Rate Reductions and New Product Introductions All That They Seem?
Lenders reducing rates is great, let’s not gloss over that at all. It is a significant thing when any lender reduces rates or introduces new competitive products after several months of rate hikes. The fact that rates are coming back down alone should stimulate the market more and should make mortgage borrowing more affordable for people who have been struggling as of late. However, lets not forget that the lenders increased their rates and set the benchmarks themselves. Senior mortgage and protection advisor at Oportfolio Jade Pinkerton had this to say about the rate reductions:
“It’s a good sign that lenders are reducing rates, of course. But in my eyes, it also proves that the mortgage lenders definitely overshot things previously and had put the rates up too high, to unnecessary levels. August this year was a very quiet month in the market. It could have been due to high rates, but also because it is usually the quietest month of the year (with people going away etc). It wouldn’t surprise me if lenders were a bit shocked by the low number of mortgage cases coming in, and so decided to drop rates to try and encourage more business. It is likely that we will see more rate reductions going into September and as whole of market broker, Oportfolio will have access to all of them.”
Always Speak To a Mortgage Broker Before Jumping at New Rate Reductions
For borrowers interested in taking advantage of these rate reductions, it’s essential to consult with mortgage advisors who can provide guidance tailored to individual financial circumstances. Oportfolio Mortgages is an expert and experienced mortgage broker and our advisors job is to assist our clients in navigating the evolving and frankly volatile mortgage landscape. If you would like to discuss any of the above rate reductions and introductions or anything else to do with mortgages or protection, please give us a call or send us an email. We are here to help and would be delighted to assist in any way we can.
