Mortgage rates: Three big lenders cut rates in new hope for market

Houses in Westminster and Pimlico, London

Houses in Westminster and Pimlico, London

Jack Walters

By Jack Walters

Published: 28/07/2023

- 14:23

Updated: 03/10/2023

- 13:35

Homeowners have received a major boost after the UK’s inflation dropped at a better-than-expected rate

Nationwide revealed it would reduce fixed mortgage rates by up to 0.35 per cent on Friday.

TSB announced an even more marked drop of up to 0.55 points on its two-year purchase and remortgage products.

Barclays lowered its rates by a modest 0.15 points on Thursday.

HSBC became the first major lender to cut rates this week to round off a major boost for British homeowners.

Stack of coins with small houses on top

Stack of coins with small houses on top


Coventry Building Society and Skipton Building Society also cut rates.

The average two-year fixed mortgage dropped from 6.86 per cent to 6.83 per cent on Thursday, data firm Moneyfacts has claimed.

Five-year deals fell from 6.36 per cent to 6.34 per cent.

Two-year buy-to-let rates were down at 6.94 per cent from 6.97 per cent.

Bank of England Bank of EnglandPA

The mortgage rate decreases come after experts underestimated the UK’s inflation rate.

Inflation eased to a 16-month low of 7.9 per cent in the year to June.

Economists had expected the figure to drop to just 8.2 per cent.

Consumer price index stood at 8.7 per cent in May.

Image Nationwide branchNationwide Building Society are said to be cutting its fixed mortgage ratesPA

Markets believe the Bank of England may not have to raise interest rates to as high as previously thought.

However, the Bank of England is still expected to raise its rate from five per cent to 5.25 per cent.

The Monetary Policy Committee will meet to decide its base rate on August 3.

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