High street banks are shaving interest rates on new home loans for both buyers and people looking to remortgage ahead of punishing increases in Stamp Duty crunch
Santander, Barclays, TSB and the Halifax are reducing rates on new deals after some others cut the cost of new home loans earlier this week.
The falls are good news for people looking to push through a purchase ahead of increases in stamp duty which come into effect in April and will add thousands of pounds to the cost of buying.
Mortgage brokers have welcomed the reductions with some hoping fixed rate deals could drop below 4 percent in the coming weeks, however industry experts say Britons face having to wait until next year for more significant cuts.
Any reduction in loan rates will help those trying to remortgage, however many in this group will find they have to pay significantly more than under their fixed rate deals that are coming to an end.
Recent figures from the Bank of England suggest as many as four million homebuyers face ‘extreme payment shock’ as a result of higher mortgage repayments in the next three years.
Santander has cut over 70 fixed-rate loans by up to 23 basis points, while TSB will pull selected purchase products and cut others by as much as 15 basis points.
It has also introduced cashback of £250 on all residential mortgages at 85 percent loan to value and above.
The bank’s Graham Sellar said: “We’re pleased to deliver this bumper range of rate cuts across more than 70 products, alongside adding cashback for those looking at higher LTVs; helping more customers manage their borrowing for less and improving affordability for those hoping to secure a home ahead of the April stamp duty changes.”
Barclays head of mortgage and savings, Mark Arnold, said: “Christmas can often be an expensive time of year and the changes we are making are designed to help customers save money, whether they are homebuyers or homemovers.
“Introducing these new rates, with many offering a £0 product switching fee, will benefit our customers and may help to ease the financial burden involved in buying and moving house.”
Iain Swatton, Director at Exemplar Financial Services, welcomed the cuts saying: “With lenders starting to unwrap festive treats for borrowers, competition in the market is heating up like a glass of mulled wine.
“These reductions are a welcome gift for buyers and those remortgaging, especially with affordability pressures still looming large. Let’s see if other lenders join the festivities and spread more cheer as we head into the holiday season.”
Ben Perks, Managing Director at Orchard Financial Advisers, told Newspage: The long wait is over, competition is finally returning. Lenders are coming out swinging as they fight for business in the final few weeks of 2024.”David Stirling, Independent Financial Advisor at Mint Mortgages & Protection commented: “After weeks of eyeballing each other post-Budget, lenders are finally entering the arena to hopefully see out 2024 in truly gladiatorial style.”
TSB’s positive cuts have laid down the gauntlet following Barclays this morning and this should only mean more competition all week now as lenders are clearly intent on seeking to attract business.”
Justin Moy, Managing Director at EHF Mortgages commented: “On a cold day, another High Street lender is warming the hands of mortgage borrowers with significant improvements to a number of their fixed rate deals. Whilst the market has cooled since the Budget in October, this is the second set of rate cuts this week so far, and with others likely to join in this week, we could see some pressure on those sub-4% deals before the year is out.”
