Written by Kevin Peachey, Cost of Living Correspondent
Competition in the mortgage sector has heated up as two major lenders, Santander and Barclays, introduced mortgage deals with interest rates below 4%. This move comes as the Bank of England’s base rate could potentially see further cuts, giving providers the confidence to lower their rates.
These eye-catching sub-4% deals, while attractive, may not be accessible to all borrowers and could come with significant fees. The availability of such deals could signal a shift in the market towards more competitive offerings after a period of subdued competition.
According to Moneyfacts, the average rate on a two-year fixed mortgage deal is currently 5.48%, while the typical rate on five-year deals stands at 5.29%. Trinity Financial broker Aaron Strutt noted that borrowers have been eager for better mortgage rates, and now they are starting to see some improvement.
The potential for rate cuts is further supported by Bank of England Governor Andrew Bailey, who indicated that the interest-rate setting committee is prepared to potentially reduce rates further. This development could benefit borrowers, as markets and lenders are expecting more base rate cuts this year, leading to reductions in fixed mortgage deals
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