Home > News > Mortgage wars: rate cuts and prices in the UK market

Mortgage wars: rate cuts and prices in the UK market

NatWest and Virgin Money have become the latest big lenders to slash rates on their fixed mortgage deals, prompting claims that a full-scale home loan “price war” has broken out.

The moves came after it emerged on Wednesday that four of Britain’s largest home loan providers were cutting the cost of their new fixed-rate deals, with Halifax reducing rates by up to 0.71 percentage points from Friday and HSBC, Nationwide and TSB making similar moves.

Twenty-four hours later, NatWest announced it was cutting rates on its house purchase and remortgage fixed home loans by up to 0.65 percentage points, also with effect from Friday. That means a five-year fixed rate aimed at homebuyers with a 10% deposit that is currently priced at 6.64% will be offered at a rate of 5.99%.

Other NatWest deals, including buy-to-let and shared equity mortgage deals, will also have their rates cut.

Virgin Money announced it would be launching a range of cheaper remortgage deals for those wanting to fix their monthly payments. The lender indicated these would be available for only seven days, until closing time on 17 August. That prompted brokers to call it a “flash sale” and claim that banks and other lenders were battling for market share.

Kylie-Ann Gatecliffe, director at North Yorkshire-based KAG Financial, said: “The competition is on. It is great to see high street lenders reducing rates, and a rate war is welcomed by us brokers wanting to offer borrowers more appealing products. I suspect others will follow suit, and we will hopefully see the lenders yet to reduce also start to reprice.”

Other commentators said that a fall in housing transaction volumes had clearly rattled lenders.

Lewis Shaw, founder of broker Shaw Financial Services, said that after months of mortgage rate rises, “this is the light at the end of the tunnel we’ve all been waiting for”. He added: “If we see positive inflation data next Wednesday, expect more of this.”

With Virgin Money making a move with its seven-day sale, the indications were that “we’re now fully in a mortgage market price war”, said Riz Malik, founder and director at broker R3 Mortgages.

“This is not only great news for residential borrowers but also a silver lining for buy-to-let landlords who have felt sidelined,” he added.

HICH LTD has continually raised the quality standards in the UK property survey market. Our multi-award-winning property survey service has made us the leading reference in the property survey market.

We offer property survey services of the highest quality. Using state-of-the-art equipment, we provide excellent property surveys at affordable prices. Our prices are based on the number of rooms rather than the value of the properties, so you will always get the best value for money with our services.

Please look at our Trustpilot page and see why customers have chosen us as their favourite property survey provider!

At HICH LTD, we work to serve our clients and make the world a better place for everyone. We actively collaborate with NGOs to promote environmental, social and charitable causes. If you want to know more about our efforts or how you can help, contact us at admin@hich-ltd.co.uk.

HICH LTD extends a warm invitation to contractors and service providers throughout the UK to join our network; by joining the Contractors and Service Providers Network, you will enjoy benefits such as a significant increase in customer flow, advertising on our high-traffic website, and direct contact with thousands of customers in your postcode area. Find more information here or by following the QR code in the video.