Mortgage price war

Lenders are reducing their rates as fixed-rate money in the SWAP markets has been stable for a few months now. Banks and building societies have been lending with large margins due to uncertainty and the cost of their funding lines. Appetite for lending and lowering rates has come about as the lending market now looks much less volatile and lending targets have been reset for the new year. It's impossible to second guess exactly where the market will be in the coming months, so we are suggesting that remortgage applications are still made six months early but with a review on the lender's rates closer to the time of completion. Should there be a discount available, then we can apply to switch the rate with most lenders without any additional underwriting.

Mortgage rates have been reducing now for several weeks, but we have seen very little of this reported in the news, which is frustrating when so many scary headlines are being thrown around. The leading rates are changing daily, but the best way for borrowers to ensure they are getting the best deal is by working closely with a broker. We start looking at our clients' remortgages six months in advance, and we monitor these closely, so we have had quite a few this week that we have now managed to move to an even better rate, as reductions come through thick and fast. This service is not something people would be able to manage themselves by going direct, so a broker that will look after you and keep an eye on the market is worth their weight in gold.

Daily, we are seeing more lenders come out with significant rate reductions, which is a positive start to 2023. With the housing market expected to slow down this year, these lenders will be fighting to gain a higher percentage of the reduced business available to appease their shareholders. One of the easiest ways to attract new business is to continue having the cheapest rate available and we will likely see a tug-of-war between the big six this year. With anyone applying for a remortgage, it would be sensible to approach a broker to help with this, as the market is moving fast at the moment and customers need someone that can be dynamic in keeping an eye on how lender's rates change. In some scenarios it may be beneficial changing lender during the remortgage process if rates keep reducing.

Lenders are starting to reprice aggressively as we kick off 2023. NatWest are leading the way so far, cutting fixed rates by as much as 0.74%. As lenders continue to adjust rates following the hikes sparked by the mini-Budget, and adjust to a slower housing market in 2023, we expect more lenders to follow and an all-out price war cannot be ruled out.

Fixed rates have been falling now for several weeks, essentially as they correct themselves following last year's disastrous mini-Budget, more than there is any form of a price war between lenders. This is certainly good news for those looking at buying now, or remortgaging, compared to the fixed rates available at the end of last year. As ever, the key to getting the absolute best deal for your individual needs is to engage a great mortgage broker. Note that it's the overall deal that is the key, not just the rate - a 3.29% 2-year fixed rate may sound great, but if you have to pay £2500 of fees to get it then it's only a good deal for those with a large mortgage. It is often better to have a slightly higher interest rate deal, which comes with lower overall set-up costs.

Lenders are reducing fixed rates because, as the market slows, they are fighting over a smaller pie. Presumably they are sacrificing margins to maintain transaction volumes and market share. I think we'll see this trend continue well into 2023 until lower property prices tempt more buyers back into the market.

Lenders have been reducing rates on a steady basis for many weeks now. It would just be nice to see this make as many headlines as the rate increases do.

The mortgage price war has begun as lenders now compete with each other to offer the most competitive rates available after the shambles of the mini-Budget in 2022. To access the best rates available suitable to your situation, it's best to speak to a mortgage broker who can search the entire market and make a proper recommendation.

House prices look set to fall by around 5%-10%, though mortgage rates have also fallen faster than expected. Expect rates to settle at current levels for the foreseeable unless there is a significant increase in the base rate, which is unlikely just now. This means a house price crash is becoming more unlikely. It's crucially important that borrowers consider using a whole of the market broker. Not many people realise there are over 100 mortgage lenders out there. Comparison sites such as Moneysupermarket.com or Comparethemarket.com will not show rates from lenders that offer broker exclusive deals so you could miss out on a better deal and significant savings depending on your circumstances. People can be put off by broker fees but these have come down significantly. There are also fee-free brokers so it's worth doing your research.