Earlier today we reported that as of tomorrow (Friday 11th August), NatWest is reducing their fixed rates by up to 0.65% on both 2- and 5-year fixed rates.
The lender now joins the likes of HSBC, Halifax, Nationwide, TSB and a number of other lenders in reducing their rates as the market once more reprices.
As lenders continue to drop rates newswire Newspage canvassed brokers for their opinion.
Here’s what they had to say.
Rhys Schofield, brand director at Peak Mortgages and Protection:
“With a crash of thunder and a flash of light, some rubbish interest rates flew out of sight. Granted the flurry of hefty rate reductions in mortgage brokers inboxes still equate to higher rates than consumers are used to but it’s great news for hard-pressed borrowers.
“There certainly seems to be a full blown rate war brewing with lenders once again competing for business in what feels like a much calmer and more settled market.”
Craig Fish, director at Lodestone Mortgages & Protection:
“Another of the big lenders is reducing the prices following what I consider to be an overzealous reaction to the Bank of England’s decisions. I firmly believe that most lenders are overpriced, merely to control workloads, while they adopt a ‘wait and see what our competitors do’ attitude.
“This has had a negative effect and has resulted in greatly reduced mortgage transactions, while lenders still have lending targets to achieve.
“These moves are a step in the right direction, towards where rates should have been, but I think the real rate war will commence when we see the inflation data that will be released next week, providing it continues to move in the right direction. Lenders may then be able to get their targets back on track.”
Riz Malik. founder & director at R3 Mortgages:
“This week is getting better and better. With NatWest now joining the ranks of Halifax and HSBC, those lagging behind will likely reconsider their offerings. This is great news for those currently seeking mortgage financing. August is certainly turning out to be the best month for the mortgage market yet.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“After months of rate hikes, this is the light at the end of the tunnel we’ve all been waiting for. While the mortgage and property market aren’t out of the woods, at least we’re travelling in the right direction.
“With the rate cuts by Nationwide, HSBC, TSB and Halifax, it was already hotting up for a rate war. Now that NatWest has thrown its hat in the ring, other lenders will follow.
“Get set for some fixed rate fisty-cuffs as mortgage lenders battle it out for market share. If we see positive inflation data next Wednesday, expect more of this. I wouldn’t be surprised if rates are high 4s to low 5s by the end of the year.”
Samuel Mather-Holgate, independent financial advisor at Mather and Murray Financial:
“This is tempered good news for borrowers, but we have another inflation print before the next rate decision. Lenders think we may be at the top, but the central bank might have other ideas. If we have reached peak rates, they will settle there for months before coming down.”
Imran Hussain, director at Harmony Financial Services:
“This week is the week that keeps on giving with many lenders dropping rates. Long may it continue especially after the continued assault on working families ever since Trussonomics. Hopefully this is the start of a rate war to reduce the cost of borrowing for millions across the country.”
Gary Boakes, director at Verve Financial:
“With HSBC and Halifax announcing rate reductions this week, it is not a surprise that the rest will follow. Lenders are aware that there is currently less business and looking to make moves to pick up what they can for the rest of the year.
“Is this a start of a rate war, only time will tell, with lender economists still predicting 5.5 -5.75% base rate by end of the year it will be interesting to see what happens. I suspect the rate reductions are due to the lenders initial panic after the 0.5% base rate rise in June and now realising they never needed to increase as high and quick as they first expected.”
Kylie-Ann Gatecliffe, director at KAG Financial:
“The competition is on. It is great to see high street lenders reducing rates, and a rate war is welcomed by us brokers wanting to offer clients more appealing products. I suspect others will follow suit and we will hopefully see the lenders yet to reduce also start to reprice.”
Rob Gill, managing director at Altura Mortgage Finance:
“NatWest are now the fifth major lender this week to announce significant rate cuts, coming off the back of last month’s lower than expected inflation figure, and the Bank of England reacting with a relatively modest hike of 0.25% last week. These could be the opening salvos in a full-on ‘Back to School’ rate war next month as lenders seek to recover from a quiet July and August.”
Peter Stamford, director and lead adviser at Moor Mortgages:
“A dip in transaction volumes has clearly worried the lenders. The rate war begins; let’s hope this response is not too little, too late.”
Joe Garner, founder & managing director at Joe Garner Consulting:
“The banks are trimming the worst-case fat they packed into the last set of knee-jerk, close your eyes and reload rate rises that punctuated the earlier part of the Summer.
“Transactions are down by a third year on year resulting in a rate war to grab as much of the remaining volume as possible. If the squabble for share intensifies and the BofE play ball we could see rates drop to 4 point something in the latter part of the year.”
Ben Tadd, director at Lucra Mortgages:
“With yet another big lender slashing their rates, the rest of the market will now have to act hastily to catch up, so as not to miss their slice of market share.
“This latest round of rate reductions will only serve to bring confidence back to the purchase market for those borrowers who had previously paused any plans to buy.
“Assuming the inflation data remains positive going forwards and rates continue to slide, we could well be looking at fixed rates just below 5.00% by the end of 2023.”
Ranald Mitchell, director at Charwin Private Clients:
“What generosity! This is a sure sign the bigger lenders are falling well short of their lending targets. This is the most obvious lever for them to pull, to gain market share and is fantastic news for the retail mortgage market and mortgage holders. How long will it last and how far will they go? Let the battle commence!”
