Britain's mortgage pricing war is intensifying after two of the country's largest lenders cut interest rates further.
Santander and Halifax Bank are the latest major banks to announce cuts to mortgage rates across their product lines.
Halifax confirmed yesterday that interest rates on many of its mortgage products have been reduced by 0.19 per cent.
Similarly, Santander said it would implement rate cuts across its fixed-rate mortgage lines from today.
Other major banks including HSBC, Barclays and NatWest have made similar product changes in recent weeks.
Currently, Halifax is offering the lowest two-year fixed-rate mortgages to individuals buying property with a 40 per cent down payment.
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The Bank of England's base rate has remained at its highest level in 16 years since it was raised to 5.25% in August last year.
This particular product has an interest rate of 4.63 per cent and costs £1,093 in fees.
Starting today, Santander has reduced certain home fixed interest rates by between 0.02% and 0.16% at the time of purchase.
The company confirmed there would be no changes to its buy-to-let mortgages, wholesale loans, product transfer mortgages and home tracker rates.
Lenders have been increasing mortgage rates over the past few years in response to recent interventions from the Bank of England.
The central bank's Monetary Policy Committee (MPC) raised the base interest rate to 5.25% as part of measures to curb inflation.
Analysts expect the central bank to cut interest rates in the coming months, and many banks and building societies are preparing for this.
Reacting to Santander Bank's latest interest rate cut, brokers analysed the current state of the home loan market in Uttar Pradesh.
“Santander's latest move could intensify interest rate competition between the UK's largest lenders,” Stephen Perkins, managing director at Yellow Brick Mortgages, told the news page.
“Further cuts are likely ahead of the base rate cut expected in August. The mortgage market is very buoyant at the moment.”
Justin Moy, managing director at EHF Mortgages, added: “This is a small but significant rate cut from Santander and puts it within the rate range of Barclays and NatWest, who have already increased their rates this week.”
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Mortgage payments have skyrocketed for many borrowers in recent years.
“Buyers won't see a huge improvement in their monthly payments, but these small benefits add up over time. Momentum for lower mortgage rates is building.”
Hannah Bashford, director of Model Financial Solutions, highlighted the potential change in government as a catalyst for these changes.
She explained: “Put your summer plans on hold, a price war looks imminent.”
“With optimism building ahead of the election and interest rates expected to be cut throughout the summer, this could be the start of some good news for the mortgage market.”