TSB has introduced reduced rates, effective from Friday 12th April.
Rates are being cut by up to 0.2% for homemovers, and up to 0.1% for those looking to remortgage.
Although small, these cuts come at a time when brokers expected lenders to increase rates and follow yesterday’s US inflation data.
Newspage asked brokers for their views, below.
Reaction:
Justin Moy, managing director at EHF Mortgages:
“This is a positive move by TSB, hopefully fuelled by a combination of better market conditions and a desire to grab some market share.
“Sometimes the level of the cuts is not as important as the fact that a major lender is reducing rates.
“The hope is that this sentiment will ripple through to the rest of the high street lenders.”
Tracey Dixon, broker at Pure Mortgage and Protection:
“TSB’s decision to cut rates is a bold move. It’s particularly surprising given the wider economic climate and rising interest rates elsewhere.
“However, it could be a sign that TSB is looking to attract new customers and gain a competitive edge in the mortgage market.
“The rate cuts are unlikely to be significant enough to trigger a mortgage price war, but they could certainly encourage potential borrowers to consider TSB.
“It’s important to remember that even a small reduction in interest rates can save borrowers thousands of pounds over the lifetime of their mortgage.”
Ben Tadd, director at Lucra Mortgages:
“Most other lenders in the market are currently looking to nudge their rates up.
“Coupled with the news from the US yesterday regarding inflation data coming in higher than expected, TSB’s rate reductions are a welcome surprise for borrowers, against the backdrop of mortgage rates creeping up elsewhere.”
Gary Bush, financial adviser at MortgageShop.com:
“This is a shot in the arm from TSB. I don’t find TSB’s decision to decrease some homemover and remortgage rates as surprising as others.
“There has been some confusion why lenders aren’t acting more competitively of late when the market is showing, on multiple indices, rosier times ahead potentially.
“Many lenders still appear to be focusing on their profit ahead of UK borrowers, many of whom are really struggling at present.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“Do not hang about. These rates could well be going north within the next 10 days.”
Imran Hussain, director at Harmony Financial Services:
“This is a positive move from TSB indicating they are in the market to lend and want to grab some market share while other lenders up rates.
“These cuts may be short-lived unless other lenders decide to drop rates, as service levels will be key for any lender reducing rates right now.”
Robert Timm, managing director at Sunland Mortgages
“TSB are offering some positivity to borrowers during a week where there has been little to shout about.
“These won’t be market-leading rates, but they are good news for borrowers regardless. Small gains.”
Ben Perks, managing director at Orchard Financial Advisers:
“A refreshing move by TSB. While many lenders are increasing, they’ve taken the bold step to reduce. The savings may be small, but they’re savings nonetheless.
“Borrowers are desperate for lower rates, so will celebrate even the smallest of movements.”
Peter Stokes, director of mortgages at Davidson Deem:
“In relation to the markets, you could argue the move is a little surprising, but when you take into account customer service levels and appetite for business, maybe not so much.
“We all know lenders tinker with their margins to turn the tap on or off for new business, and I feel confident this is more to do with that than the cost of funds falling.”
