TSB has made a substantial cut (Image: Tartezy via Getty Images)
Lenders are now slashing their mortgage rates with increasing momentum, brokers have suggested, as first direct, TSB and Santander emerge as the latest high street names to unveil reductions, with TSB trimming selected rates by as much as 0.8%. While brokers warned the situation remains delicate and noted “the News at Ten could still deliver another setback”, they concurred that “it’s starting to feel like things are moving the right way at last“.
From Friday, April 24, TSB has reduced selected residential purchase and remortgage rates by up to 0.6% and rates on selected Buy to Let and Portfolio Buy to Let products by up to 0.8%. Meanwhile, Santander has announced that it is reducing selected new business first-time buyer (FTB), home mover and remortgage fixed rates by up to 0.25%. In its product transfer range, it’s reducing certain residential fixed rates by up to 0.08%.
On Thursday, first direct revealed it had lowered rates across “dozens of two and five-year fixed mortgage products”, with decreases of up to 0.38 percentage points coming into force from today. The rate reductions for first-time buyers and home movers mean that first direct’s range begins at 4.71% (2 Year Fixed Fee Standard at 60% LTV).
The identical product for existing customers is priced marginally lower at 4.66%. The cuts are most pronounced across the bank’s two-year mortgage products, yet extend across its full range of 2 Year and 5 Year offerings, covering all LTVs up to 95%. Within the five-year category, the steepest reductions stand at 0.25 percentage points, applied across the 5 Year Fixed Fee Standard at 90%, 85% and 90% LTV, now priced between 4.95% and 5.09%.
Liam O’Hara, head of mortgages at first direct said: “We are committed to supporting our customers on their house purchase journey and continue to review our pricing regularly to ensure the best value we can for all our customers. Our broader product features are designed to provide as much benefit and flexibility as we can – ranging from unlimited overpayments, 40-year maximum terms, and capped booking fees. We’re regularly looking at ways to provide even more value for customers.”
Santander has also made changes (Image: Ceri Breeze via Getty Images)
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In recent days, a growing number of major lenders, including HSBC, Barclays and Virgin Money, have slashed their rates, and brokers have urged borrowers to capitalise on the opportunity while it presents itself.
Justin Moy, managing director of Chelmsford-based EHF Mortgages, said: “Lenders are clearly looking to encourage borrowers and, based on this evidence, feel that the outlook is better than just a few weeks ago. Swap rates haven’t improved significantly, suggesting that lender confidence is just as important as pricing.
“The good news here is that both property buyers and remortgage borrowers see a benefit, and so they may want to grab the opportunity while they can. Though TSB have been a bit expensive recently, these rate cuts are a significant shift for the lender as muted confidence returns to the mortgage market.”
Ken James, director at London-based Contractor Mortgage Services, also welcomed the reductions but warned that the market remained “hypersensitive”.
He said: “With TSB and Santander now joining Virgin Money, Barclays, Halifax and a growing list of other lenders trimming mortgage rates, the question is are we finally edging out of the worst of the disruption triggered by the Middle East conflict? On the surface, the momentum looks encouraging. After far too much swap rate volatility and a pricing whiplash from lenders, any downward movement feels like a welcome shift.
Mortgage deals have been changing quickly (Image: Daniel Leal-Olivas/PA)
“But let’s not pretend the sector is breathing easy. If we blink at the wrong moment, the News at Ten could still deliver another setback. Markets remain hypersensitive, and confidence is still as fragile as the peace talks.”
Harry Goodliffe, director of Winchester-based HTG Mortgages, struck a similarly cautious note, suggesting “it still feels a bit early to call the latest cuts a proper trend”.
He added: “Things are improving as the market adjusts to the tentative stability in the Middle East, but it’s twitchy and could turn again very quickly, so I wouldn’t be reading this as the start of a sustained fall in borrowing costs just yet.”
Richard Davidson, mortgage advisor at onlinemortgageadvisor.co.uk, struck a cautiously optimistic note: “These are confident moves that suggest lenders are ready to compete for business again. However, it’s not yet clear whether this pace of cuts will continue and take us back to the lows we saw in February. But with all eyes on the international situation, it’s starting to feel like things are moving the right way at last”
Ben Perks, managing director at Stourbridge-based Orchard Financial Advisers, called on borrowers to move swiftly or risk missing out: “TSB have made some chunky cuts to their rates and follow a few of the high street lenders to move rates downward this week, which is an encouraging time for borrowers.
“My message would be to act fast and secure rates while you can. After all, we’re only one Trump Truth Social post away from the next hike.”
Nouran Moustafa, practice principal and IFA at Roxton Wealth, characterised the TSB reductions as “material” and evidence that meaningful competition is returning to the high street.
She said: “While some lenders have clearly priced tactically in recent months, reductions of up to 0.60% are material and will absolutely catch the attention of borrowers. It does not remove affordability pressures overnight, but it is a step in the right direction.
“What the property market needs now is not just isolated cuts, but sustained momentum, consistency and a clear willingness from lenders to support activity. Against the backdrop of Iran-driven volatility in oil and inflation expectations, cuts like this feel even more meaningful because they show some lenders are still willing to compete.”
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, added: “One swallow doesn’t make a summer, but TSB cutting seems to be part of a broader trend of lenders quietly admitting that their rates have been eye-wateringly high.”