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NatWest Group PLC (LSE:NWG) has announced a second reduction in mortgage rates within a month, this time focusing on business deals as lenders vie for market share. Effective Tuesday, NatWest will reduce rates on two-year fixed mortgages by 19 basis points. The new rate for a 60% loan-to-value (LTV) mortgage will be 4.40%, while the rate for an 80% LTV mortgage with a £1,495 fee will be 4.85%. Additional reductions of 13 and 17 basis points will apply to rates for first-time buyers and those using help-to-buy schemes, respectively.
In response to NatWest's move, Barclays PLC (LSE:BARC) has also announced its own set of rate reductions. Starting tomorrow, Barclays will lower selected rates by up to 0.2%. Its two-year fixed rates will be 4.55% with an 85% LTV and £899 product fee, while its five-year fixed rate will be 4.05% for a 75% LTV with no product fee, or 3.95% with a product fee.
HSBC Holdings PLC (LSE:HSBA) will follow suit, with plans to reduce mortgage rates across the board, with the new rates set to be announced tomorrow.
NatWest's earlier rate cuts in mid-August had already lowered five-year fixed rates to below 4%, and the latest reductions will also apply to high-value and green mortgages. Other lenders, including Nationwide, TSB, and Virgin Money, have also reduced mortgage rates throughout the month, following the Bank of England’s base interest rate cut.
Iain Swatton, director at Exemplar Financial Services, described the recent rate cuts as a "very positive sign," suggesting that lenders are actively adjusting their pricing to attract buyers. He noted that these reductions offer relief for clients remortgaging from low rates and signal a growing optimism in the market.
Craig Fish, director at Lodestone Mortgages & Protection, anticipates that core lenders will soon follow suit, while Rohit Kohli, director at The Mortgage Stop, advised borrowers to act promptly. He indicated that ongoing rate reductions are shifting the market dynamics, potentially leading to higher prices in the near future.
