Four large lenders cut priority rates in front of the Bank of England resolution this week

On By Littum

Four major lenders are reducing the mortgage rates in front of a Key Bank of England decision this week.

Barclays, Coventry Building Society and Yorkshire Building Society have all fallen rates on a number of offers.

Mortgage loan agreement with calculator, keys and house models.

1

A number of lenders have reduced the mortgage ratesCREDIT: ALAMY

Barclays has reduced the prices of buying and remortgage products by up to 0.25 percentage points.

For example, a two-year solution with a loan-to-value (LTV) of 85% will fall from 5.04% to 4.79% with a fee of £ 899.

LTV is the ratio of your priority loan compared to the value of your property.

The same agreement without a fee drops from 5.23% to 4.99%.

Halifax, part of the Lloyds Banking Group, which is the UK’s largest mortgage loan, also cuts the rates by up to 0.3 percentage points tomorrow.

Product transfers, home lords of the home and some first -time buyer prices are among the reductions.

Meanwhile, the Coventry Building Society has made reductions across all its regular rate agreements by up to 0.27 percentage points.

Accord Mortgage, a subsidiary of the Yorkshire Building Society, has dropped the rates by up to 0.25 percentage points.

Santander, TSB and Co-Op have also reduced the rates over the past week.

Andrew Montlake, CEO of Broker Coreco, said more lenders could follow.

What is the Bank of England Base Rate and how does it affect me?

He said, “Where Halifax goes, other lenders tend to follow, so these cuts can trigger a chain reaction of the lending community.”

The movements come in front of a Key Bank of England (Boe) decision later this week.

The bank’s monetary policy committee (MPC) is expected to be broadly reducing the basic rate on Thursday.

MPC met in late December when it decided to stay at 4.75% after lowering it from 5% the month before.

The basic rate is used as a handle to control inflation and is used by High Street Banks to set the rates it offers customers on savings and borrowing, including mortgage loans.

A decrease in the basic frequency does not affect the rate you pay on a fixed agreement if you already have one as you have already locked in the rate for a certain period of time.

But those who take a new priority agreement may find that a lower basic interest rate is reflected in the fixed rates offered at that time.

Nick Mendes, from broker John Charcol, said with swap rates that fell lenders had more room to lower the rates.

Swap rates support the price of fixed priority agreements.

He said: “Decision makers are expected to largely lower the rates by 25 basic points at their meeting on February 6th.

“Although they have not explicitly confirmed this, the bank has strongly suggested that it expects to reduce the rates once a quarter all year.”

What happens to mortgage rates?

Markets mostly expect Bank of England To reduce the basic rate four times this year with inflation around Boe’s 2% goal But the British economy detects low growth.

Boe lowers the basic rate to encourage households to spend money, which should see gross domestic product (GDP) rise.

GDP measures the value of goods and services produced in the UK and estimates the size and growth of the economy.

If it rises steadily, it is drawn on a healthy economy.

Any cut to the basic interest rate is also good news for mortgage holders to see their rates fall.

But remember, when you want to see that your priority rate falls depends on the type you have.

Those on tracker -mortgage loans that track basic rate should see it fall pretty quickly, usually the month after any change to the basic rate.

Standard variable speed (SVR) Priority loans also follow basic rate, but not as close as Tracker offers.

Those with fixed offers do not see an immediate influence unless their agreement is close to quitting.

If you are on a fixed deal, be sure to shop around well before it ends to avoid the risk of ending up with a higher rate SVR.

Generally, you can lock into a new fixed mortgage loan agreement for about six months before your current ends.

You can move to a better deal if you also come along during this time.

David Hollingworth, from L&C Pantel loan, said: “To secure an appointment for a few months to come to ensure that if there is further uncertainty, they have a rate in place but will still allow them to move to a better appointment if there are additional cuts. ”

How to get the best deal on your priority loan

If you are looking for a traditional type of priority loan, the best prices depend entirely on what is available at a given time.

There are several ways to land the best deal.

Usually, the greater the deposit you have, the lower the speed you can get.

If you have remuneration and your loan-to-value ratio (LTV) have changed, you will have access to better prices than before.

Your LTV goes down if your excellent mortgage loan is lower and/or your home’s value is higher.

A change of your credit score or a better salary can also help you access better prices.

And if you are approaching the end of a fixed deal soon, it’s worth looking for new offers now.

You can sometimes lock the current offers up to six months before your current deal ends.

Leaving a fixed deal early comes usually with a fee for early exit, so you will avoid these extra costs.

But depending on the cost and how much you could save by switching versus adhesive, it may be worth paying to leave the deal – but compare the cost first.

To find the best deal use a Tools for comparing mortgage loan To see what is available.

You can also go to a mortgage broker who can compare a much larger range of appointments for you.

Some charge an extra fee, but there are plenty that gives advice free of charge and only gets paid on commission from the lender.

You must also be included in fees for the mortgage loan, although some have no fees at all.

You can add the fee – sometimes more than £ 1,000 – to the cost of the mortgage loan, but be aware that you mean you pay interest on it and will cost more in the long term.

You can use a priority preacher to see how much you could borrow.

Remember that you will also need to pass on the lender’s strict eligibility criteria, which will include affordable checks and look at your credit file.

You may also need to provide documents such as utility bills, proof of benefits, your last three months’ paycheck, passport and bank statement.

Do you have a money problem to be sorted? Get in touch by e-mailing [email protected].

Plus, you can join our SOLNGANSEN CHATS AND TIP Facebook group to share your tips and stories