Experts think cuts could accelerate if inflation statistics this week are lower than projected. Multiple mortgage lenders, including Santander and TSB, are dropping rates again as price cuts continue.
Starting today, Santander is lowering fixed rates by up to 0.14 percentage points and tracker rates by 0.15 percentage points.
TSB has announced up to a 0.2 percentage point reduction in residential and buy-to-let mortgage rates. Last week, Virgin Money and Clydesdale Bank dropped their usual variable rates by 0.25 points, and Virgin also introduced limited-edition special rates that will be available until Monday, July 22.
MPowered Mortgages, a small lender, is also lowering rates for the second time in a week, having already done so last Thursday. It slashed two-year fixed rates by up to 0.15 percentage points last week and by an additional 0.3 points today.
Meanwhile, the Yorkshire Building Society is lowering interest rates by up to 0.25 percentage points, the second drop in two weeks.
The reductions come after weeks of downward pricing by lenders ahead of a probable Bank of England interest rate drop next month.
Rates are gradually lowering across the board. Two weeks earlier, the average two-year fixed mortgage was 5.97%, while the average five-year fixed mortgage was 5.53%.
However, following multiple decreases, including those from large lenders such as Halifax and Nationwide, the averages are currently 5.91 percent and 5.49 percent, respectively, according to Moneyfacts.
Experts expect mortgage rates to fall further, with brokers anticipating rates below 4% for individuals with the largest deposits or equity within weeks.
Aaron Strutt of Trinity Financial said:
However, the timing of rate decreases could be determined by whether inflation falls as forecast on Wednesday.
Elliott Culley of Switch Mortgage Finance had the following to say:
Other experts feel the base rate decision has little bearing on whether lenders decide to decrease rates.
Jane King, a mortgage broker from Ash Ridge, has said the following:
Mortgage rates often follow swap rates, which are based on long-term forecasts of what will happen to the Bank of England base rate, but they can also be impacted by banks’ desire to attract business if more people want to buy homes.
The Bank of England’s base rate is expected to fall in 2024, most likely in August or September.
However, higher-than-expected inflation data between now and then could delay the chances of a rate cut in the near future, perhaps raising mortgage rates again.