TSB has reduced its interest rates by up to 0.15 of a percentage point on selected mortgages for borrowers looking to remortgage their home.
The bank said this means its five-year fixed-rate mortgages for remortgage borrowers are now at their “lowest ever”, starting at 1.74 per cent for zero to 60 per cent loan-to-value (LTV) with the addition of a £995 fee.
Rate reductions in the residential mortgage range include a three-year fixed-rate mortgage for remortgage borrowers for zero to 75 per cent loan-to-value (LTV) with rates reduced by 0.15 of a percentage point.
A five-year fixed-rate mortgage for remortgage borrowers with zero to 85 per cent LTV will now include reduced rates of up to 0.15 of a percentage point.
This is not the first time this month TSB has looked at its mortgage portfolio. It also announced it would cut its rates on selected buy-to-let mortgages in the first week of May.
They include two-year fixed rates for home-movers and remortgage borrowers with rates reduced by between 0.2 of a percentage point and 0.25 of a percentage point.
Also, the three-year fixed rate for home-movers and remortgage borrowers has been lowered by between 0.1 of a percentage point and 0.15 of a percentage point – excluding the no-fee 60 per cent LTV product.
Provider view
Roland McCormack, TSB mortgage distribution director, said: “Just last week, we reduced the rates for a number of our buy-to-let mortgages. Now, we are further helping people to borrow well by launching our lowest ever five-year fixed rate for remortgage borrowers, as part of our rate reductions for selected products in our remortgage range.”
Rates for two and three-year fixed-rate mortgages for house purchase borrowers for 90 to 95 per cent loan-to-value mortgages will increase by up to 0.15 per cent.
Adviser view
Ishaan Malhi, chief executive and founder of online mortgage broker Trussle, said: “The fact that TSB is making notable cuts to its remortgage rates says a lot about where the action is in the mortgage market at the moment. The latest figures from the Council of Mortgage Lenders (CML) have shown fluctuating levels of demand from first-time buyers and movers, while buy-to-let activity is dropping. But the remortgage sector is bucking the trend, as borrowers make the most of the low interest rate environment.
“With more than three million borrowers currently paying over the odds on a standard variable rate, there’s a huge hidden market of borrowers who could be saving up to £3,500 a year by switching. No wonder then that some lenders are designing products to capture this growing market.”
Charges
£995 fee.
Verdict
The review of the average provider’s mortgage portfolio is a common occurrence, with rates dropping as regularly as sterling after the Brexit vote, so this is no unusual benchmark.
However, with the rise of the 'mature' mortgage client, or those lucky enough to be approaching the end of mortgage debt, the option to remortgage may be an attractive one and the dropping of rates by TSB in this sector gives the bank a competitive lending advantage.
With a remortgage package from HSBC skirting just under the TSB product in percentage terms, but with the exclusion of help with valuation, the rate does not quite pip it in terms of the lowest in the market, but comes within a whisker of it finally opening the market up to a little product competition for advisers and their clients.
