Bank of America will be lowering some of its mortgage rates starting tomorrow. This decision comes after other lenders have been increasing their rates recently.
Barclays announced that they will be reducing rates on specific products by up to 0.20 percentage points across their residential purchase and remortgage range. The bank explained that this move was in response to the volatile period in the swap markets, which are used by lenders to price mortgages.
Many major lenders have been raising mortgage rates due to the swap rate environment. The Bank of England recently decreased the base interest rate to 4.75 per cent, marking the second cut this year. However, experts predict that rates will decrease more gradually given the current economic conditions.
Barclays’ head of mortgage and savings, Mark Arnold, expressed his excitement about lowering core mortgage rates during this volatile time in the swap markets. The bank aims to pass on the benefits to their mortgage customers whenever an opportunity arises.
One of the changes includes a remortgage deal at 4.3 per cent starting Wednesday, down from the current 4.5 per cent rate. This product is targeted towards borrowers with 25 per cent equity and comes with a £999 fee.
Nicholas Mendes, a mortgage technical manager at broker John Charcol, commended Barclays for being the first high street lender to lower mortgage rates in response to market changes. He mentioned that the reductions offer some relief to borrowers amidst the recent trend of rising rates among lenders.
While these rate cuts may not have a significant impact, they provide some breathing space for borrowers navigating the current borrowing climate. This move by Barclays could potentially lead to more repricing across the market if conditions stabilize, bringing a positive change to the mortgage landscape.
According to Moneyfacts, the average two-year fixed homeowner mortgage rate on Tuesday was 5.53 per cent, slightly lower than Monday’s 5.54 per cent. The average five-year fixed mortgage rate remains at 5.28 per cent.
Overall, the decision by Bank of America to lower mortgage rates comes as a welcome relief to borrowers amidst a period of uncertainty and fluctuating rates in the market. This move by Barclays could signal a positive shift in the mortgage landscape, offering hope to those looking for more affordable borrowing options.
