Lenders start repricing fixed rates as swaps fall

This morning, a number of lenders have repriced their fixed-rate products in light of recent Swap rate improvements, led by the Trump Tariff announcements last week.

TSB have announced cuts of up to 0.25%, Gen H by up to 0.2% and Pepper by up to 0.4%.

With swap rates continuing to improve, the turbulence triggered by Trump’s trade tariffs looks set to benefit to mortgage borrowers, especially those looking for a new deal in the coming months.

Newspage asked brokers if they believe more High Street and mainstream lenders will follow suit this week? Also, could this be a sustained correction in mortgage pricing or a ‘fortnight blip’ that will rebound once trade talks are made across the world? Views below.

Andrew Montlake, Managing Director at Coreco said, “Given the sharp drop in swap rates, some might be surprised that lenders haven’t acted sooner. However, lenders have likely been waiting to see if the market uncertainty calms. If one of the big six lenders comes out with some sizeable cuts, then we could see a mini rate war break out. That said, we still do not expect massive drops given the volatile market and the potential for a sudden change of direction from the White House.”

Harry Goodliffe, Director at HTG Mortgages added, “Fixed rates are falling and this time it’s more than just market noise. Lenders like Gen H, Pepper and TSB are already trimming rates, with some cutting by as much as 0.40%. The backdrop? Swap rates are sliding on the back of global uncertainty, and that’s fuelling talk of Bank of England rate cuts sooner rather than later. If this momentum sticks, we could see a wave of reductions from bigger lenders, too. Borrowers may want to keep their eyes peeled — what looks like a short-term blip could quickly turn into a golden window.”

Stephen Perkins, Managing Director at Yellow Brick Mortgages said, “After lenders have patiently waited for a recovery that hasn’t materialised, they have finally started to pass on the swap rate reductions to borrowers. However, we are yet to see one of the big six lenders show their cards and start the rate war proper.”

Imran Hussain, Director at Harmony Financial Services added, “And so it begins. The question is whether these cuts will be followed by other lenders. Amid all the chaos in the markets, the weeks ahead could be a perfect time for those who are looking to purchase a property or those whose fixed rates are coming up for renewal within the next 6 months. People should speak to their brokers ASAP, as this could shape up to be a fast-moving market.”

Elliott Culley, Director at Switch Mortgage Finance said, “Recent events in America are a complete change to the global market and have led to decreases in SWAP rates as a result. It’s likely some lenders will try to take advantage of this, but the landscape keeps changing and if deals are made on trade we could see SWAP rates start to increase again. It’s extremely difficult to predict whether this will be a flash in the pan or something more deep rooted at this stage, so we may see some lenders acting more cautiously and not making any substantial changes yet.”

Justin Moy, Managing Director at EHF Mortgages added, “Tentative fixed rate repricing is starting to creep into the market, and this next round of rate changes has the potential to be the most significant for a few years. Reflecting improved Swap rates, lenders are wary of reducing rates if this causes a rush for a few weeks, especially if we see a quick rebound after swap rates have fallen.”