Banks, including HSBC, First Direct and the UK’s biggest lender the Halifax, are offering rates of below 4 per cent on five-year fixed-rate deals.
The rate reductions have led to competition in the market that could continue to benefit borrowers, according to Adrian Anderson of property finance specialists Anderson Harris.
“The banks have got strong balance sheets, they’re keen to lend, and they’ll be trying to price mortgages as competitively as they can to try and get more money out the door,” he said.
The Bank of England held the base rate at 5.25 per cent for the third consecutive time in December.
However, market predictions are for interest rates to fall more quickly.
While the decision to buy should be based on personal reasons, says Anderson, “It’s a good time to be getting on the property ladder, because it does look like we’re nearing the very bottom of the market in terms of house prices.
“Many people have been putting off buying because of the high rates, but mortgages are certainly more affordable than they were.”
The 1.6 million UK borrowers whose fixed-rate mortgages are due for renewal in 2024, are also urged to act.
“It’s definitely good news for people who have to fix again,” said Anderson. “Even though the prediction is that mortgage rates will most likely continue to fall, my advice to people who are re-mortgaging is to take action now.”
Read more about this story in the Evening Standard Homes and Property.