There’s some good news on the horizon for Cheltenham landlords with mortgages as rates are likely to drop a bit further at the very end of the year or in early January.
Big lenders getting ahead of the competition
Two of the Big Four lenders – Barclays and HSBC – have stolen a march on the rest by announcing rate cuts earlier this month. HSBC’s most notable reductions are on the two-year Fixed Fee Saver at 60% LTV and Barclays has made changes to its range of purchase-only, remortgage-only, purchase and remortgage and customer reward ranges for residential borrowers.
Barclays’ changes include a fixed rate purchase-only deal at 60% LTV for a fee of £899, which has a newly-lowered rate of 4.23%. There’s also the fee-free version, which has dropped in rate to 4.45%.
These changes are a signal of stability
Market analysts believe these interest rate cuts mean that the market is moving into a period of stability after a turbulent few months for borrowers and lenders.
SWAP rates peaked and then fell in November
SWAP rates, which lenders pay to corporations and financial institutions to secure fixed funding for a predetermined period, spiked after the UK’s budget and the US election, which drove up mortgage rates. The markets have calmed down a bit since, which means that SWAP rates are a bit lower.
These rate drops are good news for residential homeowners and landlords, as lenders will almost certainly pass on their reduced costs to borrowers as soon as possible. Fixed rates should fall a little more in late December and January, bringing smiles to many faces.
Another interest rate cut is unlikely
The Bank of England cut rates from 5% to 4.75% in early December, which was the second rate cut in 2024. Unfortunately, the especially high inflation rates have probably scuppered the chances of another base rate cut for January 2025. Such a cut would, however, have little impact on fixed-rate home loans over the short term.
