Mortgage rates slashed hours before inflation announcement in boost to Britons
Mortgage rates slashed hours before inflation announcement in boost to Britons
PA
Mortgage rates have been slashed by several major lenders ahead of the next inflation announcement.
Barclays, NatWest and Coventry Building Society all reduced rates in a major boost to British homeowners.
Barclays is cutting its two-year fixed rate for those with a 15 per cent deposit from 6.96 per cent to 6.66 per cent.
The UK’s second-largest bank will also cut its two-year and five-year fixed-rate residential mortgages for buyers with less than a 15 per cent deposit or equity in the property.
Barclays Bank in Sheffield, South YorkhirePANatWest’s reduction of 0.45 per cent hits across its purchase, remortgaging and first-time buyer ranges from Wednesday.
Coventry Building Society has announced a fall on all of its new fixed-rate loans where homeowners have equity of between 20 per cent and 35 per cent.
The latest cut comes after other mortgage lenders reduced rates in the past week, including Lloyds Banking Group.
The decision comes despite an expected interest rate hike from the Bank of England.
An image of a NatWest branchPAExperts in the City believe Threadneedle Street will push the official base rate to six per cent by next spring.
Interest rates are already at a 15-year high at 5.25 per cent.
The Bank of England has pushed through fourteen consecutive increases in a bid to curb persistently high levels of inflation.
Nicholas Mendes, of mortgage brokers John Charcol, said: “The Bank of England will have concerns over this morning’s wage growth and the impact on inflation.
Bank of EnglandPA“Markets are now pricing in a Bank Rate peak of six per cent which means we are certain to see a further rise of 0.25 percentage point in September regardless of the inflationary data that is due out tomorrow morning.”
Chris Sykes, of broker Private Finance, added: “Lenders are passing on somewhat overdue discounts leftover from the positive US and UK inflation data of a few weeks ago.
“They have always been fast to increase rates so as to not affect margins, but are slower to pass any discounts onto borrowers as they watch the market and make informed decisions.”
The announcement comes as Zoopla’s executive director Richard Donnell predicted mortgage rates could fall below five per cent later this year.
Donnell expects mortgage rates to settle between four per cent and five per cent shortly after.