Average mortgage rates fall despite Labor leader’s turmoil: Moneyfacts – Mortgage Strategy

Average mortgage rates fell this week despite growing uncertainty about the next prime minister, according to the latest Moneyfacts rate watch.

The two-year average was 5.75%, down 3bps from 5.78% last week, and the five-year average was 5.67%, down from 5.7%.

The largest rate reduction was seen in the fixed five-year to 100% LTV, which saw a decrease of 11bps to 5.89%.

Other significant cuts were made to the three-year fix at 65% LTV, which fell by 9bps to a normal rate of 5.03%, and the two-year fix at 50% LTV, which also fell by 9bps to 5.29%.

Moneyfacts head of consumer finance Adam French said: “The mortgage rate has eased this week despite growing uncertainty as markets worry about what a change in Labor leadership could mean for economic growth and monetary policy.

“Although this shows a gradual return to development, rates remain much higher than before the start of the conflict in the Middle East. In total, 26 lenders have made significant changes in their scope.

“Large lenders such as NatWest, Santander and First Direct continued to be very competitive while smaller lenders who found it difficult to attract higher funding costs were quick to raise rates.

“Deals such as Leeds, West Brom and Chorley Building Societies have delivered new and improved proposals aimed at first-time buyers and home movers, despite signs of a very low property market.”

Significant rate changes this week

• AIB (NI) – Adjusted rates saw mixed moves, either cut by up to 3bps or increased by up to 18bps.
• Accord Mortgages – Select fixed rates up 10bps.
• Bank of Ireland Intermediaries – Bespoke fixed rates cut by up to 23bps; deadlines extended; introduced new Bespoke Large Loan products.
• Buckinghamshire Building Society – Deposit Lite discounted flexible products have been replaced by fixed rates.
• Chorley Building Society – Selected rates increased by up to 30bps; deadlines extended; launched new products 95% LTV first time buyers.
• Clydesdale – Extended discounted rate end date.
• Coventry Building Society – Fixed rates saw mixed movements, either reduced by up to 12bps or increased by up to 5bps.
• first direct – Selected default rates are reduced by up to 22bps.
• Furness Building Society – New established and large loan products introduced with return and equity incentives.
• Gen H – Fixed rates increased by up to 18bps.
• Hanley Economic Building Society – Loan range withdrawn.
• Kensington – Selected products discontinued; new Select and Select special default levels introduced; incentives are extended.
• Leeds Building Society – New and extended fixed rate ranges have been launched, including FTB and Reach products.
• Mansfield Building Society – A new 95% LTV rate has been introduced for homebuyer borrowers.
• NatWest – Selected fixed rates cut by up to 21bps.
• NatWest Intermediary Solutions – Selected fixed rates reduced by up to 21bps.
• Nationwide Building Corporation – Selected fixed rates cut by up to 36bps.
• Newcastle Building Society – Fixed rates up 20bps; deadlines extended; new tracker products introduced; selected products have been withdrawn.
• Sustainable Building Society – Fixed and discounted variable rates reduced by up to 25bps; new modified products and New Venture are introduced.
• Royal Bank of Scotland – Selected fixed rates cut by up to 21bps.
• Santander – Selected fixed and tracker rates reduced by up to 19bps and 40bps respectively; FTB fixed rates increased; new FTB solid and tracker products are introduced.
• Suffolk Building Society – Fixed and discounted variable rates increased by up to 16bps and 50bps respectively; deadlines have been extended.
• TSB – Selected default rates are reduced by up to 20bps.
• Vernon Building Society – Standard rate expiration dates extended.
• Virgin Money – Selected rates have been reduced by up to 26bps.
• West Brom Building Society – Selected fixed and New Build fixed rates reduced by up to 26bps; new purchase, mortgage and New Build products introduced; selected products have been withdrawn.