"Big four" high street lenders are stepping up mortgage rate cuts as the view that interest rates have peaked grows in conviction.
HSBC Holdings PLC (LSE:HSBA) online arm First Direct lopped 0.4 percentage points of its rates from today while Lloyds Banking Group PLC (LSE:LLOY) arm Halifax went further with cuts of up to 0.46 points, including a five-year fix at 4.97% if you can stump up a deposit of 10%.
Fees for the Lloyds mortgages, which drop to 4.53% for a 40% deposit, are £999. First Direct is also offering 4.74% for mortgage borrowers with a 40% deposit.
HSBC UK itself is expected to announce rate reductions tomorrow when all eyes will be on the UK inflation rate number, with forecasts of a drop below 5% to around 4.8% currently the consensus.
Most economists believe that will also certainly mean an end to the Bank of England hiking rates.
In a statement, First Direct said it is the most substantial round of mortgage rate drops it has made since February this year.
Liam O’Hara, head of mortgages, said: “Our switcher rates have also been significantly reduced to ensure existing customers have competitive options when looking to re-mortgage.”
New products in the 95% LTV (loan-to-value) space today are also being issued, he said.
According to financial data specialist Moneyfacts, average two-year fixed homeowner mortgage rates are around 6.21% and 5.8% for a five-year fix.
Lloyds, through Halifax, is the UK’s largest mortgage lender.