Brokers say lenders must do this to better support borrowers, especially first-time buyers
With a number of mortgage lenders – several of them big ones – continuing to reduce their product rates, many brokers welcome the rate cuts, though some wish lenders would do more.
On Tuesday, Santander reduced its fixed rates on selected residential purchase mortgages, remortgages, buy-to-let, and product transfers by up to 25 basis points (bps). HSBC announced that it is lowering fixed rates across its mortgage range from today, November 22. TSB also announced rate cuts of up to 30bps, while Virgin Money said it is reducing rates for home purchase and larger mortgage loans. Other smaller and specialist lenders also repriced their products to make their offerings more affordable.
Michelle Lawson (pictured), director at Lawson Financial, commented that while it was great to see the competition and the drive for lenders to attract business in the lower LTV tiers, it would be even better to see this spread among the greater risk 90% to 95% LTV brackets.
“Hopefully, the confidence will continue and this will help first-time buyers get back into the market which is much needed,” she added.
Ben Tadd, director at Lucra Mortgages, considered: “This latest round of rate reductions spells further good news for prospective purchasers and will help to inject some confidence into the market that mortgage payments on the whole are becoming more affordable across the board,”
“Those would-be buyers who are keen to move but have been reluctant to act because of soaring rates now have their ears pricked up at the sound of rates tumbling further. As the rate war rumbles on with lenders competing for market share, this will help inject real impetus into the property market with purchase transactions likely to be on an upward trajectory.”
Kylie-Ann Gatecliffe, director at KAG Financial, told news agency Newspage that lenders had to be more competitive than ever to stand out right now, as the rate reductions keep rolling in.
“These latest cuts are great news for those looking to get on the ladder, move or remortgage,” she added. “It has been a rocky year, so it’s great to see it ending with a fiery rate war.”
Peter Stamford, director at The Mortgage Uni, agreed that the recent mortgage rate reductions by major lenders are sparking a lively competition in the market.
“This is fantastic news, particularly for first-time buyers and those looking to remortgage,” he added. “As rates continue to drop, we're hoping to see a surge in market activity, with more people considering buying or moving homes.
“This trend is not just a boon for homeowners but also a strategic move by lenders to capture more market share. It’s a dynamic time in the mortgage industry, with the potential for even more positive developments as we move into the new year.”
Justin Moy, managing director at EHF Mortgages, remarked: “Following the lead from Barclays at the end of last week, other high street lenders are heating up the market for both homeowner and remortgage cases, with cuts of up to 0.3%.
“We are definitely seeing a pick-up of purchase cases, mostly first-time buyers who see current property prices and falling mortgage rates as a good opportunity to buy.”
Meanwhile, other brokers want to see lenders provide greater support by reducing rates on their higher loan-to-value (LTV) mortgages.
“I would love to see more rate reductions for those with 5% or 10% deposits, as this is first-time buyer territory,” said Imran Hussain, director at Harmony Financial Services.
Darryl Dhoffer of The Mortgage Expert pointed out that the biggest in the recent rate reductions were “at the safe as houses end of the market, namely for those with a 40% deposit or a similar level of equity.
“Lenders need to put an end to the phoney war and drive down rates at higher loan-to-values, as that’s the way to inject real life into the mortgage and property market,” he stressed. “We need less PR and more of a concerted push.”
What are your thoughts on the recent rate reductions by mortgage lenders? Feel free to share them with us by leaving a comment in the discussion box at the bottom of the page.
