Major Lenders Cut Rates Ahead Of Bank Of England Rate Call

Following moves by several lenders to cut fixed rates last week after Bank of England governor Andrew Bailey said interest rates were close to their peak (see stories below), more providers are tweaking rates down, writes Jo Thornhill.

Nationwide building society is cutting selected residential fixed rates by up to 0.29 percentage points from tomorrow (13 September).

The mutual, the UK’s second biggest lender, said swap rates (the wholesale interest rates at which banks lend to each other and which affect fixed mortgage rates) have continued to fall allowing it to make reduction to mortgage rates.

The biggest cuts are seen in two-year fixed rates for home purchase for borrowers with a small deposit. Nationwide is offering a two-year fix at 6.44% (down by 0.29 percentage points) with a £999 fee for buyers with just a 5% cash deposit.

Among other highlights Nationwide also has a fee-free three-year fixed rate at 6.09% (75% LTV). Its product transfer fixed rates and deals for additional borrowing will also be trimmed from tomorrow by up to 0.14 percentage points.

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Accord, part of Yorkshire building society, has cut its fixed mortgage rates for residential borrowers for the second time in as many weeks. The reductions, by the broker-only lender, are up to 0.2 percentage points and effective tomorrow (13 September).

Among the highlights, Accord is offering a two-year fixed rate for home purchase at 5.94% (75% LTV) with a £1,495 fee, a three-year fixed rate for remortgage at 5.95% (85% LTV) with a £995 fee and a five-year fixed rate for remortgage at 5.6% (90% LTV) with a £495 fee.

Foundation Home Loans, the specialist buy-to-let lender, has cut rates across its core range by up to 0.9 percentage points. Its fixed-rate deals, available through brokers, now start from 6.59%. Two-year fixed rates start from 7.24% with a 1% fee.

Skipton building society has unveiled its new fixed rate deals for residential and buy-to-let borrowers, after it announced rate cuts yesterday.

It is offering a two-year fixed rate for residential remortgage at 6.26% (60% LTV) with a £995 fee and a five-year fixed rate equivalent at 5.59%.

The number of mortgage products on the market (5,338) is at its highest level since February 2022 (when the total was 5,356), according to data compiler Moneyfacts, suggesting stability could be returning to the home loans market.

Average two- and five-year fixed rates have fallen since the start of August and are at 6.70% and 6.19% respectively.

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But the latest quarterly statistics from the Bank of England show a subdued picture of mortgage lending and house buying. While new mortgage advances (loans to be made in the coming months) picked up in the second quarter of 2023 – up 26.2% on the first quarter – at £61.7 billion, the figure is 26.6% less than in the same period last year.

The total value of all gross mortgage advances in the second quarter was £52.4 billion, which was £6.3 billion lower than in the previous quarter, and 32.8% lower than the same time period in 2022. This is the lowest recorded level since 2020.


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