Brokers say lenders are now cutting margins to secure business
High street lenders Halifax and NatWest announced further fixed rate cuts on Monday afternoon, with lower rates available from Tuesday, November 28.
In an email sent to brokers, Halifax said rates will be slashed by up to 72 basis points (bps) on selected two- and five-year fixed rates across its homebuyer ranges, including first-time buyer, new build, large loans, and affordable housing – shared equity / shared ownership, and the equivalent green home products.
Meanwhile, on NatWest’s new business range, rates of selected two- and five-year purchase deals will be cut by up to 26bps and 30bps, respectively, while selected two- and five-year remortgage rates will be slashed by up to 40bps and 24bps, respectively.
Also reduced were selected two- and five-year fixed rates of other NatWest products for first-time buyers, shared equity - purchase, Help to Buy shared equity - remortgage, buy-to-let for purchase and remortgage, green for purchase and remortgage, and buy-to-let green for purchase and remortgage.
The latest rate reductions from the two major lenders have brokers thinking that lenders are now ready to shave their margins in order to secure business and boost activity.
“Just when you think lenders may have run out of margin to play with, two or three of the big players suddenly dig deeper into their pockets and find some more to give away,” Justin Moy, managing director at EHF Mortgages, said. “It’s clear that lenders are desperately trying to fill their application numbers ready for 2024, even if profit margins are being severely squeezed as a result.”
Stephen Perkins, managing director at Yellow Brick Mortgages, awardee for The Best Mortgage Companies to Work for in the UK, said the substantial rate reductions from two of the largest mortgage lenders were a sign of growing confidence in rate forecasts.
“This is also an element of fighting hard for the lion’s share of deals yet to be agreed in 2023,” Perkins added. “With all lenders behind on annual lending targets, there is, no doubt, a real appetite to ensure they maximise their lending volume before the year comes to a close.”
Steven Hargreaves, mortgage and protection adviser at The Mortgage Co, said lenders cutting margins could be the sign buyers need to see.
“It can only be good news for existing borrowers with deals coming to an end, and new borrowers coming into the market,” he concluded.
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