HSBC and NatWest lower rates as more lenders bring back sub-5% fixes
Banks and building societies have continued to lower the price of their fixed and tracker rate mortgages over the last few days.
Bank of Ireland, HSBC and NatWest are the latest big lenders to announce rate improvements as market conditions continue to ease.
One building society is offering fixed rates from 4.6% to borrowers with 40% deposits and a clear credit history.
Even though the Bank of England base rate is expected to rise further, tracker rate mortgages are increasingly popular, mainly because they are so much cheaper than the fixes.
Some of these variable rates provide more flexibility as they allow borrowers to switch to a fixed rate or repay the mortgage at any point without substantial early repayment charges.
Aaron Strutt, product director at Trinity Financial, says: "If you are looking for the cheapest possible deal, then the discounted and tracker rates are the most cost-effective option at the moment.
"While these are likely to get more expensive, the base rate would have to rise by some margin for them to be higher than the current fixes.
"If you are looking for payment security and want to take a two, three or five-year fixed rate, there are rates available well below 5%. The longer-term fixes tend to be cheaper than the two-year deals."
What is likely to happen to rates next year?
The consensus in the mortgage market is that fixed rates are likely to improve over the coming months. If the property market continues to slow, the banks and building societies will try to boost their propositions and lower their rates to attract borrowers.
While the property purchase market has slowed significantly in some areas, estate agents expect more properties to be listed in January. A huge number of borrowers also need to remortgage next year because their fixed rates expire.
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