New sub-4% three-year fix and five-year mortgages from just over 3.75%. What happened to rates this week?
Banks and building societies have continued to lower their mortgage rates this week, with big lenders like Barclays, NatWest, Santander and Halifax making changes.
It is now possible to secure a three-year fix below 4%, five-year fixes at just over 3.75% and two-year fixed mortgages at just over 4%. Ten-year fixes are higher and priced around 4.6%.
This week Santander lowered all its standard residential fixed rates by between 0.03% and 0.27% across its property purchase and remortgage ranges. It also lowered larger loan fixed rates for those looking for £1 million+ mortgages.
Halifax also launched a range of three-year fixes, and Barclays lowered its rates for borrowers with smaller deposits plus its three-year deals. HSBC also made rate amendments across most of its residential mortgage range. Its two-year fixed rate for those with a 10% deposit saw a small cut of 0.05%, now just below 5.2%.
Applicants with 35% or 40% deposits tend to have access to the lowest rates, although rates are becoming more competitively priced, especially for those with a 25% deposit. Some lenders have also increased their income multiples, and more 5x income mortgages are available.
Aaron Strutt, product director at Trinity Financial, says: “There isn't a shortage of lenders lowering their rates at the moment, as the changes keep coming. Many of our clients are taking two-year fixes, although they also opting for five-year rates because they are cheaper. Given some of the rates available after the mini-budget, they look like good value for money.
"The slightly puzzling part of the market is that many banks and building societies still offer cheaper rates to borrowers purchasing a property. They are often charging those looking to remortgage around 0.2% more."
Click here to view our larger mortgage loan rate table.
Mortgage approvals up
Individuals borrowed a net £2.8 billion in mortgage debt during July, which is the highest amount since November 2022. According to further data from the Bank of England’s latest Money and Credit report, July’s borrowing represented a £0.2 billion increase on June, when borrowing stood at £2.6 billion.
The annual growth rate for net mortgage lending rose to 0.6% in July, continuing the upward trend in recent months. Meanwhile, net mortgage approvals for house purchases rose to 62,000, which is the highest since September 2022 (65,100). Contrastingly, remortgage approvals fell to 25,100 in July from 27,300 previously.
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The information contained within was correct at the time of publication but is subject to change.
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