Mortgage lenders cut interest rates despite Bank of England rise

Mortgage lenders have cut their rates despite the recent Bank of England’s base rate rise to 3%.

“Lenders are repricing all the time and it looks like most rates will come down a touch,” said James Kear, Preston Baker’s Head of Financial Services (pictured).

“So far just today I’ve already seen messages from six major lenders about reduced rates coming through over the next 48 hours.”

He added: “Swap rates appear to have found their level now. Swap rates are a leading marker for mortgage interest rates; lenders who buy money in at swap rates are benefitting buying money cheaper and lenders who don’t use this function need to stay competitive so this is reducing rates overall. Things are settling down for sure.”

Swap rates rose quickly after former Chancellor Kwasi Kwarteng’s “Mini” Budget, but have more lately levelled.

Lenders cut their rates by up to 0.45% despite the Bank of England’s 0.75% base rate rise – the biggest increase in 33 years. However, this increase is said to have already been priced into many fixed rate mortgage deals and that some deals have even bigger rates priced in.

“The cuts in mortgage interest rates may be small, but they are travelling in the right direction,” said James.

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