This week Barclays and Halifax have both reduced prices on their fixed-rate mortgage deals, following in the footsteps of another major lender, Nationwide, the previous week.
Things are getting competitive with Halifax yesterday announcing a market-leading 3.79% deal which is available for a two-year fixed rate.
Whilst this particular deal is for buyers who need to borrow at up to 60% loan-to-value (LTV) and comes with a £1,999 fee, it demonstrates how competitive mortgage lenders are becoming and, according to brokers, signals that more price cuts could come.
Indeed, Tony Castle, managing director at PFG Mortgages, speaking via the Newspage agency, said: “The rate war is seriously heating up in the mortgage market. He added: “Aggressive pricing shift signals intensifying competition among high street banks, with borrowers set to benefit as lenders fight for attention in a cooling market.”
A combination of Trump’s tariffs and inflation falling to 2.6% in March have raised the prospects of the Bank of England cutting interest rates again next week.
Meanwhile, some major banks, including Morgan Stanley, have predicted interest rates to be at 2.75% by mid 2026.
With all this in the mix, it’s no wonder brokers have reported a growing number of buyers holding out for lower rates.
But is this the right strategy? Many think buyers could be taking a risk by holding off on the basis of predictions.
Indeed, Sean Horton, managing director at Respect Capital, speaking to Newspage, said: “Some buyers are undoubtedly playing the waiting game for lower rates, but this is a risky strategy. We’re definitely seeing people holding back, hoping the Bank of England will cut rates further, or perhaps waiting for this as a signal to make a move.
“Truth is, swap rates already factor in expected cuts. So, a Bank of England rate cut might not move the needle too much. Lower rates could also spark a house price jump as pent-up demand floods back, wiping out any savings on mortgage costs.
“There are lenders that will allow a rate switch as long as the mortgage hasn’t started. This could be a good back-up.
“My advice? If you’ve found the right property and can afford it now, proceed. The market doesn’t wait for perfect conditions, and neither should you.”
Other brokers explained, the process of buying and taking out a mortgage can take some time, and during this period there is room for manoeuvre if rates fall further.
Michelle Lawson, director at Lawson Financial, was among them. She told Newspage: “Delaying applications is putting people at a disadvantage as most good mortgage brokers will monitor the market and apply any reduced rates as and when applicable to purchase, remortgage and product switches.
“Rates are reducing, which is why it is best to act to get the best worst-case scenario on the day and get the ball rolling. Otherwise borrowers could be setting themselves up to fail. All situations can change on a sixpence so be prepared.”
Justin Moy, managing director at EHF Mortgages added: “Rates are not going to drop 2% overnight.
“Rate cuts will be small and any saving will be minimal in the grander scheme of things compared to jeopardising the whole transaction. If it’s your dream home and it’s affordable, don’t delay.”
