Mortgage News
Lenders cutting rates despite high swaps: John Charcol
Lenders are cutting fixed rates as they are becoming more comfortable with the wider economy, according to Ray Boulger, senior technical manager at John Charcol.
Despite high swap rates, Yorkshire Building Society announced cuts today in its fixed rates. It follows Halifax, HSBC, Chelsea, Nationwide and Coventry Building Societies who all cut rates last week.
Boulger said there has been competition with a number of new lenders entering the market. Lenders are also far less dependent on swap rates for their new funding and are looking toward their savers to balance the books.
“It is also John Charcol’s belief that lenders believe the bounce in house prices and the interest rates will remain low for some time – resulting in far less repossessions than initially expected. There is also a modest improvement in wholesale funding,” added Boulger.
The buy to let market has also benefitted from an increase in competition, with an increased range of products and/or lower rates announced over the last week from BM Solutions, Godiva, Whiteaway Laidlaw and Aldermore.
“With the buy-to-let market suffering badly over the last two years, this is welcome news for many of the UK’s landlords,” concluded Boulger.
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