This week HSBC and NatWest have both launched sub-4% mortgage deals, undercutting Nationwide to offer the lowest rates on the market.
HSBC has introduced a five-year fixed rate at 3.92% which is available at 60% LTV and open to first-time buyers and home movers with a £1,499 fee. A rate of 3.95% is also available with a £999 fee.
It follows on from the launch of NatWest’s 3.97% five-year fixed rate deal, which is available to home movers only at 60% LTV with a £1,495 fee, that arrived on the market yesterday.
The previous cheapest rate on the market was Nationwide’s five-year fixed rate at 3.99% which was launched two weeks ago.
Nationwide’s product has been made available to new customers moving home and has a £1,499 fee.
A growing number of lenders have reduced mortgage rates after the Bank of England cut interest rates to 5% last Thursday, the first reduction since 2020.
Elsewhere, figures released by the Finance & Leasing Association (FLA) reveal that the second charge market sector has continued to expand, with new business growing by 3% in June.
The latest figures show the highest number of new agreements since September 2022, with the market continuing to grow each month in the first half of 2024.
New business by value and volume grew by a total of 17% and 12% respectively in the first six months of 2024, compared to the same period in 2023.
Most of these types of mortgages are taken out to consolidate existing loans, which accounted for 59.2% of these loans in the first half of the year. In total, 23.1% of second charge mortgages were for home improvements and to consolidate existing loans, with 12.5% taken out for home improvements only.
Fiona Doyle, FLA Director of Consumer & Mortgage Finance and Inclusion, said: “In June, the second charge mortgage market reported the highest number of new agreements since September 2022.”
She added: “As always, customers who are concerned about meeting payments should speak to their lender as soon as possible to find a solution.”
