Santander has announced a further round of rate reductions of up to 0.20%, which will go live from Tuesday.
News agency, Newspage, asked brokers why lenders are reducing rates given that the base rate is expected to rise further, whether we could see reductions from other lenders and if we are now in a mortgage price war.
Magni Finance cautioned that even though this is good news, the mortgage market still “remain” uncertain and “volatile.”
Ashely Thomas director at Magni Finance said, “Though this is welcome news, the mortgage market remains highly uncertain and volatile.
“Inflation has come down but this was expected. I expect to see more lenders look to reduce their rates as they increased them significantly in the past two months or so. Perhaps what we’re seeing is a reaction to an over-reaction.
Samuel Mather-Holgate, independent financial advisor at Mather and Murray Financial said, “Lenders are still trying to attract new business by cutting rates for borrowers, but this won’t last.
“Whilst new lending has nearly dried up, lenders have the appetite to take on borrowers with little margin in their pricing, but with inflation staying high and a central bank more likely to increase rates rather than cut them, rates won’t continue to be cut for much longer.
“Until the Bank of England starts cutting rates, which should be later this year, borrowers face uncertainty around which direction the cost of borrowing money will go.”