This morning, Metro Bank introduced a wave of new rate reductions, with a headline rate of 4.99% for a 2-year fixed rate switch product up to 80% loan-to-value (LTV).
In light of these new rates, Newspage asked brokers for their thoughts.
Sofia Jones, mortgage and insurance adviser at Penny House, said: “It’s great to see Metro catching up with other lenders.
“Product transfer rates for existing clients have dropped from 6.19% to 4.79%.
“This in itself will save one of my clients £35,200 over two years in interest alone.
“The rate cuts we’re seeing now are having a hugely positive impact on people’s finances.”
Michelle Lawson, director at Lawson Financial, added: “Even Metro Bank are now leaving Nationwide out in the cold.
“This is a massive drop for borrowers. Metro Bank are especially good for self-employed applicants with their excellent criteria.”
Charles Morley, director of mortgage distribution at Metro Bank, said: “Affordability is often the biggest barrier to taking that first or next step onto the property ladder.
“I hope that by introducing these changes today we can help bring homeownership dreams a little closer to reality.”
Further reaction:
Gary Bush, financial adviser at MortgageShop.com:
“To see Metro Bank reducing their rates by a fair chunk demonstrates the feelings of lenders at the moment.
“The mortgage rate price war rages on.
“It’s clear from their lack of activity that Nationwide are tactically withdrawing from the market at the moment having dipped their toes in too deep in the later stages of 2023.
“There is no point releasing rate decreases that send your processing levels into a tailspin.
“Sadly, a large number of existing clients, and those who already have a mortgage offer in place, who are looking for a downward tweak may well have to be patient for the time being in tying up those transactions.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“Whilst all rate reductions are welcomed, these rates aren’t groundbreaking or going to put much pressure on the larger lenders who have already reduced to more competitive levels.”
Anil Mistry, director and mortgage broker at RNR Mortgage Solutions:
“The rate battle rages on. Hats off to Metro Bank for stepping up. Now it’s your move, Nationwide. As a major lender, we’re waiting for your response.”
Denni Tyson, mortgage broker at Henchurch Lane Financial Services:
“Seeing a bank like Metro that has been through the wars in recent months announce sub-5% rates underlines the current thinking of lenders.
“Metro’s criteria are varied, but with some great flexibility for unique cases.
“With those lenders that are always at the higher end of rates, this will be welcomed and have a knock-on effect for further reductions in the coming weeks.”
Richard Jennings CeMAP, founder and managing director at Richard Jennings Mortgage Services:
“Another day sees another lender reduce their rates across their product offering.
“With many now giving access to rates below 5%, this is great news for those who have held off completing a product switch until the new year, for those whose deal is due to end soon and for prospective first-time buyers.
“Competition among lenders is high and looks set to continue with the battle for top spot well underway.”
Peter Stamford, director and mortgage expert at The Mortgage Uni:
“Metro Bank’s latest rate cuts are a significant move, catching up with other lenders and offering a substantial saving for clients, especially for self-employed borrowers.
“This change, dropping rates to below 5%, highlights the ongoing mortgage rate war and the material impact these cuts have on household finances.
“It’s interesting to see Nationwide’s current market strategy in contrast, possibly holding back due to processing challenges.
“While not groundbreaking, Metro’s move is still a big deal for those with unique cases, signalling likely further rate reductions across the board. The competition is heating up, and it’s great news for borrowers.”
A Nationwide spokesperson said: “We regularly review rates across our mortgage range to ensure that we continue to offer a competitive range of products. In fact, over the last few months, we have reduced our mortgage rates eleven times.”
