Today’s Mortgage Rate Cut: Expert Advice for Borrowers

In a significant move, Santander will lower its mortgage rates tomorrow, particularly for first-time buyers. This reduction applies to its first-time buyer 85% loan-to-value (LTV) mortgages, now extended to 95% LTV fixed-rate products. Industry insiders describe this strategy as ‘aggressive’ and anticipate it will stimulate the housing market.

Recent Mortgage Rate Changes

This announcement follows Nationwide’s recent decision to cut rates, with reductions reaching up to 0.16%. Nationwide’s lowest fixed rate is now at 3.54%, making it competitive in today’s market. Additionally, Barclays and NatWest have also announced their own rate cuts.

• Barclays is reducing its two-year residential purchase 95% LTV rate from 4.92% to 4.60%.
• NatWest will lower its two-year fixed rate purchase mortgage at 95% LTV from 4.81% to 4.69%.
• NatWest’s two-year fixed rate remortgage at 90% LTV, with a £995 product fee, will see a drop from 4.60% to 4.52%.

Focus on First-Time Buyers

The notable aspect of these mortgage offerings is their focus on high LTV products, specifically aimed at first-time buyers. Experts believe lenders are keenly targeting this demographic. Andrew Montlake, CEO of Coreco, emphasized the positive implications of these reductions on affordability in the current market.

Montlake stated, “The recent cuts are encouraging and signal a shift influenced by falling swap rates and inflation expectations.” He added that the upcoming spring property market could be busier than usual due to these changes.

Market Volatility and Expert Recommendations

The current mortgage environment remains unpredictable. Following the Bank of England’s decision to maintain interest rates at 3.75%, many lenders have slightly raised their rates. This week, inflation data is also set to be released, which could further impact mortgage pricing.

For potential borrowers, securing a mortgage at this juncture is crucial. Richard Davidson, a mortgage advisor from onlinemortgageadvisor.co.uk, advises borrowers to lock in rates when possible. He noted the volatility of the market, saying, “Unexpected events can easily disrupt predictions.”

Davidson highlighted that most lenders offer the flexibility to switch to better rates during the process, providing a safeguard against rising rates. In the current economic climate, it’s essential to stay informed and act quickly.