By Jess Sharp, Money live reporter
Every Friday we take an overview of the mortgage market with industry experts and round up the best rates with Moneyfactscompare.co.uk.
I bet you didn’t expect to start this week’s guide by reading about Donald Trump, but he has played a big part in what’s been happening with mortgage rates and interest rate forecasts.
The US president’s “liberation day” tariff announcements had a positive impact on UK mortgage rates, with the global economic chaos contributing to swap rates falling and a string of major lenders cutting their rates.
At one point, markets stopped talking about whether the Bank of England would cut the base rate at its next meeting on 8 May, and instead began speculating by how much.
The tariffs “pause” announced on Wednesday has put paid to that – but markets were still pricing in an 85% chance of a cut in May yesterday afternoon, up from 70% before Trump shocked the world with his double-digit tariffs.
Laith Khalaf, head of investment analysis at AJ Bell, said there was a “high degree of uncertainty” about what happens to mortgage rates next.
“Should the UK impose its own tariffs on imported US goods, that could push the inflationary dial upwards. If that happens, markets might well start to walk back on the rate cuts they’re expecting.”
Rate cuts on the high street
Coventry Building Society was the first to make the move downwards this week, launching a two-year fixed mortgage with a rate of 3.89% and a fee of £999.
It actually comes top of the table for the best house purchase rates on offer…
“Hats off to Coventry. Someone had to go first and they have paved the way for some aggressive cuts. This is fantastic news for borrowers. It’s game on in the mortgage world,” said Hannah Bashford, director of Model Financial Solutions.
Barclays quickly followed suit, reducing the rates on three of its deals to 3.99%.
Other lenders made similar price cuts, such as TSB by up to 0.25%, and MPowered Mortgages by as much as 0.31%.
David Hollingworth, a director at L&C Mortgages, cautioned that “we’ve seen swap rates, a key indicator for fixed rates, continue to bounce up and down as the news changes, so the picture is still one of volatility”.
His advice for borrowers? “Securing a deal and then revisiting if rates do continue to fall could be the way to play it for those coming to the end of a deal,” he said.
Easier mortgages
Some lenders instead opted for relaxing their requirements to borrow.
Nationwide reduced the minimum income needed for single applicant first time buyers to £35,000 a year under its helping hand scheme.
The programme allows those getting on the property ladder to borrow up to six times their income when taking out a five or 10 year fixed rate up to 95% LTV.
Barclays also launched a zero-deposit mortgage for people buying their council house.
In total, Moneyfacts trends data shows there are 6,870 mortgages on the market.
Rachel Springall, finance expert at Moneyfacts, said: “Stock market unrest has been widespread in recent days. However, as five years have passed since the UK lockdown in March 2020, product choice for borrowers and savers has shown it can prosper after market turmoil.”
Moneyfacts rounds up what it calls “best buys”, which look beyond the lowest rates and take in incentives and fees. All of the following come with a free valuation…
What’s going on in the housing market?
The average UK house price fell last month, according to the latest Halifax data.
House prices were down 0.5% in March – after a 0.2% drop in February – with this equating roughly to a fall of £1,575.
This has left the average property price at £296,699, compared with £298,274 the month prior.
Despite this, the annual rate of growth remained unchanged at 2.8%.
In Northern Ireland, house prices rose at the fastest pace, up 6.6%. At the other end of the scale, prices in the South West of England rose by only 1%.
