Santander and Barclays are among the major lenders cutting interest rates on mortgage products this week.
Interest rates have risen over the past year and a half in response to changes made by the Bank of England to its policy rate.
The central bank kept interest rates at 5.25 percent, which has remained at that level over the past three months as inflation declined.
Banks and building societies have cut mortgage interest rates recently, including Santander and Barclays, which were included in Moneyfacts’ Pick of the Week.
Large lenders are lowering interest rates to remain competitive in the real estate market
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Santander has cut prices on several buy-to-let products this week, including a two-year fixed-rate deal offering 4.64 per cent.
Remortgage customers can choose between free legal fees or £250 cashback with a free valuation incentive included.
There is a product fee of £1,749 attached to this deal which can be added to the mortgage advance and is a bargain for those looking to save on any upfront costs.
In comparison, Barclays Mortgage has reduced its two-year fixed rate mortgage to 60 per cent loan-to-value (LTV) which is now at 4.36 per cent.
There are no product fees associated with this product and a free home evaluation is included in the deal allowing for overpayment.
Both mortgage products were given an ‘Outstanding Rating’ by the team at Compare money facts.
Rachel Springall, finance expert at Moneyfacts, said interest rates could fall further in the coming weeks, meaning those looking to remortgage or get on the property ladder may want to wait a little longer before shopping for the best deal.
“Successive reductions in overall average two-year and five-year fixed mortgage rates will come as a major relief to borrowers looking to refinance this year,” she said.
“Volatility surrounding mortgage interest rates has eased, with the average mortgage term rising from 17 days to 21 days, the highest number recorded in more than six months.
“There are high expectations for fixed mortgage interest rates to fall in the coming weeks, so some borrowers may choose to wait patiently until the right time to change their deal or purchase their first home.”
Despite this trend of lower mortgage interest rates, the prime rate is not expected to fall until the latter half of 2024.
Bank of England Governor Andrew Bailey said he hoped the “big change” in mortgage interest rates would continue to fall throughout the year when he appeared before the Treasury Committee earlier this week.