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TSB latest lender to announce rate cuts, as SWAPs edge down

ended 24. August 2023

TSB was this morning the latest lender to announce rate cuts. With 2- and 5-year SWAP rates also coming down over the past 24 hours, brokers welcomed the move by the TSB, albeit with caveats.

The TSB announced, on Friday 25 August, "we’re reducing rates on:

  • 2 Year Fixed House Purchase and Remortgage, 0-75% LTV, by 0.10%
  • 3 Year Fixed Remortgage, 0-75% LTV, by 0.10%

Responding to the news, Darryl Dhoffer, founder of  The Mortgage Expert, said: “These are hardly groundbreaking reductions, but they're reductions all the same.”

Stephen Perkins, managing director at Yellow Brick Mortgages, agreed the news around both TSB and SWAP rates was positive but suggested the Bank of England could ruin the party yet: “More rate reductions from the TSB and, probably more crucially, the reductions in the 2- and 5-year SWAP rates are excellent news for borrowers. Let us enjoy it before the Bank of England once again stomps in to ruin the party.”

Perkins' scepticism was echoed by Gary Bush of the Potters Bar-based MortgageShop.com: “Hopefully the Bank of England will pause at the next Monetary Policy Committee meeting and take proper stock of inflation's trajectory, rather than singing to Rishi's hymn sheet over his foolish targets.”

Meanwhile, Kirsty Wells, director of Saint Leonards-on-Sea-based Blueprint Mortgages, said every reduction counts but criticised lenders for being slow to pass on any cuts: “I really hope more lenders follow as I cringe every time I speak with a client and the most suitable option for them is a 2-year deal that is over 6%. Lenders are very quick to increase their rates but take a little while longer to pass on any reductions. A lot of customer deals are ending in the next few months and they are going to be worse off by, on average, £300 a month. So I would love to be able to offer clients a better option than what is already reserved for them.”

Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages, suggested more reductions may soon follow after Wednesday's poor PMI data: “Following yesterday's disastrous PMI data, there will be more lenders repricing following market movements. The great mortgage rollback continues.”

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6 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
More rate reductions from TSB and, probably more crucially, the reductions in the 2- and 5-year swap rates are excellent news for borrowers. Let us enjoy it before the Bank of England once again stomps in to ruin the party.
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Darryl Dhoffer
Mortgage Broker at The Mortgage Expert
These are hardly groundbreaking reductions, but they're reductions all the same. It's no surprise that a smaller mutual will not have the same appetite for bigger reductions compared to the Big 6 lenders, as capacity is one area they would not want to have issues with.
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Riz Malik
Director at R3 Mortgages
Following yesterday's disastrous PMI data, there will be more lenders repricing following market movements. The great mortgage rollback continues.
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Kirsty Wells
Director at Blueprint Mortgages & Protection
I really hope more lenders follow as I cringe every time I speak with a client and the most suitable option for them is a 2-year deal that is over 6%. Lenders are very quick to increase their rates but take a little while longer to pass on any reductions. A lot of customer deals are ending in the next few months and they are going to be worse off by, on average, £300 a month. So I would love to be able to offer clients a better option than what is already reserved for them.
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Gary Bush
Financial Adviser at MortgageShop.com
We are expecting a period of fixed rate falls as the market settles after eight weeks of excessive panicking among lenders. Hopefully the Bank of England will pause at the next Monetary Policy Committee meeting and take proper stock of inflation's trajectory, rather than singing to Rishi's hymn sheet over his foolish targets.
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Ashley Thomas
Director at Magni Finance
I would expect to see more lenders reduce over the next week. When one lender drops their rates, others tend to follow.