Interest rate cut is good news for borrowers – here are the lowest rates available
Every Friday, we take an overview of the mortgage market with industry experts and round up the best rates with Moneyfactscompare.co.uk…
The Bank of England’s decision to cut interest rates yesterday spelled good news for borrowers, with several lenders lowering their rates to reflect the drop to 4.5%.
Swap rates – which dictate what banks are charged to borrow money in order to lend – also fell by as much as 8.1 basis points.
Some Lloyds Bank made reductions of up to 0.45%, Halifax of up to 0.3%, HSBC of up to 0.2% and Barclays cut by up to 0.25%.
There were also lenders launching a few new deals, including a new first-time buyer deal at 95% loan-to-value from Leeds Building Society.
The market is expecting the Bank of England to cut rates up to three more times this year, which could be good news for those on a variable deal or looking to remortgage – but it doesn’t mean it’s guaranteed.
Remortgage activity is expected to boom in 2025, with around 1.8 million fixed-rate mortgages set to mature, according to UK Finance.
Nick Chadbourne, chief executive of conveyancing firm LMS, said: “All signs have been positive through the back end of 2024 – the home-mover market has been buoyant, and remortgages bounced back towards the end of the year.”
Rachel Springall, finance expert at Moneyfacts, said: “Millions of borrowers are due to come off cheap fixed mortgages, so they will be waiting with bated breath for mortgage rates to fall.
“However, the future of interest rate pricing remains unpredictable, as sticky inflation and wider economic uncertainty could limit the Bank of England’s Monetary Policy Committee from making aggressive cuts this year.
“There will be plenty of reasons for lenders to entice new business during 2025, and the government wants them to do more to boost growth in the economy, thus the debate on the loosening of lending rules.”
On remortgage deals, these are the lowest rates available…
Moneyfacts also rounds up what it calls “best buys”, which look beyond the lowest rates and takes in incentives and fees…
On the wider housing market, data released by Zoopla showed it has got off to its strongest start in three years.
The volume of new sales agreed was up by 12%, compared to January last year, the property website found.
The average price of a house was also up, hitting £267,700.
