Banks and building societies improve mortgage rates again in bid to hit lending targets

by Aaron Strutt

Oct 03 2023

Banks and building societies have continued to improve mortgage rates over the last week, with more high-street lenders bringing out deals below the 5 per cent mark.

TSB has launched some five-year fixed mortgages below 5 per cent. They are available to those buying a home with a 25 per cent deposit; they have £995 fees and a maximum loan size of £1 million. They are not quite as cheap as Virgin Money's five-year property purchase broker-only deals, at just over 4.8 per cent, but they have a bigger fee at £1,295.

Nationwide for Intermediaries has also announced a raft of rate cuts. Its lowest fixed rate deal is now below 4.95 per cent on a five-year fix for new borrowers purchasing with a 40 per cent deposit. It follows a flurry of mortgage rate reductions last week from the likes of Halifax, Santander and Clydesdale Bank. 

Barclays announced one of the largest price reductions we have seen for a while with improvements of up to 0.72% on its two-year fixed rates for mortgages up to £2 million. 

Aaron Strutt, product director at Trinity Financial, says: "Many mortgage lenders are lowering their rates to try and attract more borrowers. They are some way off from hitting their annual lending targets.

"Two-year fixed rates are starting to get closer to five per cent and five years are now available below five per cent when borrowers have a larger deposit."

Summary of mortgage rate changes over the last week:

• Halifax, part of Lloyds Banking Group, has cut selected fixed rates for purchase and remortgage by up to 0.36 percentage points. It has also joined the ranks of lenders offering deals at under 5%.
• Barclays for Intermediaries has lowered some tracker rate mortgages buy up to 0.13% and lowered selected fixed rates by up to 0.72%.  
• TSB for Intermediaries: Two-year fixed house purchase and remortgage rates lowered by up to 0.25%. The five-year fixed rate was also reduced by up to 0.30%.
• Nationwide for Intermediaries: Selected tracker rates reduced by up to 0.40%. Its fixed rates were lowered by up to 0.25%. 
• Newcastle Building Society for Intermediaries: Selected interest-only fixed rate lowered by up to 0.45%.
• Clydesdale Bank for Intermediaries: Some fixed rates lowered by up to 0.25%. It has new fixed-rate exclusive deals via brokers like Trinity Financial.

What are the private banks doing? 

Investec Bank has today announced changes to its residential and buy-to-let tracker range with rate reductions of up to 0.71%. Investec's fixed rates now start at just below 6 per cent for a two-year fix, for those with a 35% deposit. Its five-year fixes are lower. 

Investec's mortgages are available on multi-part (fixed, tracker, interest only, capital repayment & differing terms). Overpayments of up to 10% per annum are also permitted on all fixed rates.

Barclays Private Bank has also lowered rates by up to 0.35%. 

Do these mortgage changes help? 

Mortgage lenders have been lowering their rates for quite some time even though the Bank of England base rates has increased.

There still needs to be a material reduction in inflation next month before rates will get close to 4 four per cent. Undoubtedly, rates are much lower than they were around a year ago so they are more affordable than they were.  

Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation. 

The information contained within was correct at the time of publication but is subject to change.

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