Monday January 15, 2024

Mortgage Market Update: Banks Compete Below 4% Threshold
As the mortgage market experiences dynamic shifts, several major players are making strategic moves to offer competitive rates below the 4% threshold. This comprehensive update covers recent developments from HSBC, NatWest, Principality Building Society, Aldermore, The Mortgage Lender (TML), and Tandem Bank.
HSBC Initiates Residential Fixed Mortgage Rate Cuts
HSBC is set to unveil a series of reductions in its residential fixed mortgage rates, effective from January 16. Renowned for already offering competitive rates, these latest cuts are expected to elevate HSBC to the top of the tables on rates. The reductions will encompass two, three, and five-year fixed rate product transfers for existing customers seeking new deals, as well as reductions for existing customers looking to borrow more and new customers purchasing new properties. Additionally, international residential five-year fixed rate loans will also witness a decrease. Experts anticipate that HSBC’s swift reaction to competitor repricing will strengthen its market position.
NatWest Follows Suit Below 4%
In a move to stay competitive, NatWest is slashing selected residential and buy-to-let fixed rates from January 16, aligning its best deals below 4%, in line with industry trends. Noteworthy offers include a five-year fixed rate for residential remortgage at 3.89% with a £1,495 fee (at 60% LTV), bringing it in line with Santander’s market-leading five-year remortgage fixed rate. NatWest’s proactive approach extends to cutting costs for first-time buyers, shared ownership, and green mortgages, demonstrating a commitment to catering to a diverse range of borrowers.
Principality Building Society’s Rate Adjustments
Effective from January 17, Principality Building Society is implementing selected residential fixed rate reductions, ranging from 75% LTV up to 90% LTV, with decreases of up to 0.34 percentage points. Two-year rates will start from 4.49% with a £895 fee at 75% LTV, and equivalent five-year rates start from 4.28% with a £1,395 fee. The building society is also making adjustments to buy-to-let rates, aligning its offerings with evolving market demands.
Aldermore’s Moves in the Mortgage Landscape
Aldermore is making strategic adjustments by reducing selected fixed rates available through brokers, effective from January 16. The introduction of residential fixed rates at 95% loan to value (90% LTV for new builds) and cuts on various buy-to-let mortgage deals showcase Aldermore’s commitment to providing diverse options for both new and existing customers.
The Mortgage Lender (TML) Takes Bold Steps
TML has proactively revamped its product offerings, significantly reducing rates on various fixed deals. With up to 0.35% reduction on five-year buy-to-let fixed deals and 0.25% on HMO and MUB five-year fixed rates, TML is positioning itself as a player in creating a more competitive landscape. The introduction of fee variants and new two- and five-year fixed rates for expat applicants, short-term, and holiday lets further demonstrates TML’s commitment to addressing diverse borrower needs.
Tandem Bank’s Digital Innovation
Specialist digital lender Tandem Bank has made waves by cutting residential fixed rate deals by up to 0.96 percentage points. Offering a two-year fixed rate at 7.49% at 90% loan to value, Tandem Bank is contributing to the evolving landscape of competitive rates, especially for those seeking digital banking solutions.
Bank of England’s Contemplation Amidst Inflation Dip
The overarching mortgage market developments are unfolding against the backdrop of the Bank of England actively considering an early reduction in its base interest rate. Driven by a recent dip in the inflation forecast, discussions are underway to implement the rate cut sooner than initially expected. Economic forecasts from various analysts provide insights into the potential decline in inflation throughout 2024. This shift in the interest rate landscape creates an exciting era of savings for borrowers, with institutions like Santander leading the charge with sub-4.00% rates. As the market continues to evolve, borrowers can anticipate competitive rates and substantial savings in the dynamic financial landscape.