“The rate war drum is now becoming louder by the day”, Contractor Mortgage Services director, Ken James, has said following recent rate reductions from both NatWest and Halifax.
Halifax has announced rate reductions of up to 0.72 percentage points on selected two-year and five-year fixed rate products.
Meanwhile, NatWest announced a series of reductions across its new business product range such as a reduction of up to 26 and 30 basis points on selected two and five year deals.
In response to this, James stated that rates coming down is “fantastic news” for borrowers.
Following a similar reduction announcement from Barclays recently, James argued: “There is a real frenzy among lenders fighting for every scrap of business they can get as they head towards the end of the year.
“I am getting calls and emails daily from clients understandably asking me to check and double-check to see if they can squeeze an extra bit of savings from the deals already secured.”
A similar sentiment was shared by EHF Mortgages managing director, Justin Moy, who said: “Just when you think lenders may have run out of margin to play with, two or three of the big players suddenly dig deeper into their pockets.”
He attributed these announcements to major lenders “desperately” trying to fill their application numbers ready for 2024, even if profit margins are “serverly squeezed” as a result.
Meanwhile, Yellow Brick Mortgages managing director, Stephen Perkins, said the announcements are a sign of “growing confidence” in the rate forecasts with an element of “fighting hard for the lion's share of deals yet to be agreed in 2023”.
“With all lenders behind on annual lending targets, there is no doubt a real appetite to ensure they maximise their lending volume before the year comes to a close.”
Montgomery Financial founder and director, Charles Breen, said: “Hopefully, this will further improve consumer sentiment and create the foundations for a brilliant start to the new year.”
However, Breen warned that if the Bank of England raises rates at the next meeting it will “throw a spanner in the works”.
Additionally, The Mortgage Company mortgage and protection adviser, Steven Hargreaves, stated that lenders cutting margins is the sign buyers need to see.
Additionally, this can “only be good news” for existing borrowers with deals coming to an end, and new borrowers coming into the market.
Thanks to the Newspage community for sharing their thoughts with FTAdviser.
tom.dunstan@ft.com
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