Best mortgage rates edge down AGAIN as more lenders make cuts: How much lower will they go?
Barclays, Santander, Halifax and Lloyds Bank are the latest to slash rates, taking the cheapest deals as low as 3.7 per cent.
Santander and Halifax are offering two-year fixes at 3.79 per cent for those moving home with at least a 40 per cent deposit.
However, Lloyds Bank goes one better than all the rest offering the chance to get a rate as low as 3.69 per cent on a two-year fix, with a £999 fee.
The catch? Buyers will need to have a Club Lloyds bank account to get it.
On a £200,000 mortgage being repaid over 25 years, it would mean paying £1,021 a month.
In terms of five-year fixes, Lloyds Bank is offering 3.84 per cent to borrowers with a Club Lloyds account.
For those who don't have Club Lloyds account, the bank is offering a 3.79 per cent two-year deal or a five-year fix at 3.94 per cent.
From tomorrow Barclays will also get in on the action with a 3.79 per cent two-year fix and a five-year deal at 3.91 per cent, both with an £899 fee.
Barclays has also undercut some of its competitors by launching a 3.75 per cent two-year fix for property purchases if they are a premier banking customer.
For those buying or remortgaging with smaller deposits or equity, rates are not that much higher.
For example, someone remortgaging with 25 per cent equity in their home can now bag a 3.94 per cent two-year fix with TSB or a 3.96 per cent five-year fix with Santander.
And someone buying with a 15 per cent deposit can get a 4.04 per cent two-year fix with Santander with just a £749 fee.
On a £200,000 mortgage being repaid over 25 years, that would equate to paying £1,061 a month.
Will mortgage rates fall further?
Inflation is one the most important metrics that people should keen an eye on as that will have a major impact on the future direction of interest rates.
The Bank of England sets interest rates to try to keep consumer prices inflation at the Bank and Government's 2 per cent target.
At present, inflation is above that target. It rose to 3.6 per cent in the 12 months to June, rising from from 3.4 per cent in the 12 months to May.
However, the Bank of England will also closely monitor other aspects of the economy and take that into account when making its rate decisions.
The UK economy contracted in May by 0.1 per cent and the jobless rate rose to 4.7 per cent. Payrolls in the private sector contracted for the thirteenth straight month.
If inflation is deemed the biggest threat, then the Bank of England is more likely to
The theory is that raising interest rates lifts the cost of borrowing for individuals and businesses and thus reduces demand for it, slowing the flow of new money into the economy and applying the brakes.
In contrast, cutting interest rates lowers the cost of mortgage rates and other borrowing and increases demand, pushing the accelerator on the economy.
Mortgage broker Aaron Strutt of Trinity Financial thinks there is still room for rates to fall a little from here.
'Mortgage lenders are still cutting their rates despite the higher inflation figures,' said Strutt.
'Even with everything that's going on with the economy and global affairs it still seems like rates are heading down.
'I would not bet against rates being closer to 3.5 per cent over the coming months, but as we have seen so many times before almost anything can happen.
'If you get the chance to take a rate anywhere near 3.75 per cent you are doing very well.'
What about for households remortgaging?
An estimated 900,000 borrowers will reach the end of their mortgage deal during the second half of this year, according to UK Finance, the trade association for the banking and finance industry.
Many households will be coming off rates between 1 and 2 per cent, locked in prior to interest rates rocketing upwards in 2022 and 2023.
While they face far higher rates today, the blow will somewhat be softened by recent cuts.
Currently the lowest remortgage rates for someone fixing for five years are with Barclays and HSBC, both offering deals at 3.86 per cent.
Those prepared to fix for two-years can do slightly better with HSBC offering a 3.83 per cent deal.
How to find a new mortgage
Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.
Buy-to-let landlords should also act as soon as they can.
Quick mortgage finder links with This is Money's partner L&C
> Mortgage rates calculator
> Find the right mortgage for you
What if I need to remortgage?
Borrowers should compare rates, speak to a mortgage broker and be prepared to act.
Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.
Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.
Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.
What about buy-to-let landlords
Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages.
This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a broker.
This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.
Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.
If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
> Find your best mortgage deal with This is Money and L&C
Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
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