Latest news with #BoE
Scottish Sun
20 hours ago
- Business
- Scottish Sun
Santander is making a huge change to bank accounts used by thousands from TODAY
If you're not happy with the change, scroll to find out how you can switch banks DON'T BANK ON IT Santander is making a huge change to bank accounts used by thousands from TODAY SANTANDER is slashing interest rates for two of its savings accounts from today - and customers should check if they're affected. The major bank is cutting savings rates from June 3 (today) on its Good for Life ISA and Rate for Life accounts. 1 Santander is slashing interest rates for two of its savings accounts Credit: Getty The interest rate on the Good for Life ISA account will drop from 4.5% to 4.25%, while the rate for the Rate for Life account will drop from 4.75% to 4.5%. Those who have saved less than £1,000 in the Rate for Life account will still continue to earn the same rate (1%) on these balances. It comes after the Bank of England (BoE) cut the base rate from 4.5% to 4.25% last month - the fourth cut since 2020. The base rate is used by banks to determine the interest rates offered to customers on savings and borrowing costs. While a rate cut is good news for borrowers, it's usually bad news for savers, who will usually see savings rates fall when the base rate is cut. This means they will earn less on their cash. For example, the average easy access savings rate was 2.78% on May 8, when the base rate was cut. Now it has dropped to 2.72%, according to comparison site Moneyfacts. Santander is not the only bank cutting rates on savings accounts. HSBC has also cut rates on eight of its savings accounts today. Nationwide Building Society cut savings rates on 63 of its accounts on Sunday, from easy-access ISAs to children's accounts. Santander's £130 Million Recovery: What You Need to Know NatWest cut savings rates on four of its accounts last Friday. Meanwhile, rates on three of its savings accounts and a kids' current account will be slashed from July 15. How to get the best savings rate As savings rates tumble, now is a good time to check what the interest rate is on your existing account. Around £280billion is sitting in accounts paying zero interest, according to latest data from the BoE. If you have an interest rate below the rate of inflation - which is currently 3.5% - then consider moving your money elsewhere, otherwise the spending power of your savings is eaten away. Use price comparison sites such as or to browse the best savings accounts on the market. The best easy access savings rate (based on a balance of £1,000) is offered by Atom Bank at 4.5 per cent. Experts are predicting that more cuts to the base rate this year are likely, so it may be worth considering locking up your money in a fixed rate savings account if you can afford to do so. The best one year fixed rate savings account is offered by Hampshire Trust Bank at 4.45%. However, be aware that you usually can't make withdrawals out of fixed term savings accounts, even in an emergency. Anne Bowes from The Private Office said: 'Review your savings accounts and switch if you are being paid an uncompetitive rate. 'Double check the terms and conditions of any account you are looking to open – or indeed close - as some accounts may have very short-term bonuses or restricted access. 'That means you might not earn as much interest as you hoped, or get hold of the money in as timely a manner as you were expecting.' How to switch banks For customers not happy with the latest shake-up, you may want to consider switching banks. Switching bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS). Dozens of high street banks and building societies are signed up - there's a full list on CASS' website. Under the switching service, swapping banks should take seven working days. You don't have to remember to move direct debits across when moving, as this is done for you. All you have to do is apply for the new account you want, and the new bank will tell your existing one you're moving. There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account. You should get in touch with your existing bank for any old statements. When switching current accounts, consider what other perks might come with joining a specific bank or building society. Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts. And some banks offer free travel or mobile phone insurance with their current accounts - but these accounts might come with a monthly fee.
Scottish Sun
a day ago
- Business
- Scottish Sun
New mortgage rules could add £19,000 to average house price and help first-time buyers with lower deposits
Scroll down to find out what is happening with mortgage rates HOME LOAN New mortgage rules could add £19,000 to average house price and help first-time buyers with lower deposits NEW mortgage rules could add £19,000 to average house prices and help first-time buyers get on the ladder with lower deposits. Changes to stress testing practices could cause property prices to increase by between 5% and 7.5% over the next five years, claims Savills. 1 House prices could surge by up to 7.5% over the next five years, Savills said Credit: Getty New research by the estate agent also predicts the average deposit needed by a first-time buyer could fall from £58,000 to as little as £45,000 over the same time frame, The Telegraph reports. Lucian Cook, of Savills, said: 'Change would not be immediate, with the impact on house prices and transactions likely to take place over a period of five years. 'But in the medium to long term, the market would feel the knock-on effect of a widening pool of buyers." In March, the FCA reminded lenders they are allowed to tweak their stress testing based on market expectations. It said the market approach to stress testing could be restricting borrowers' access to affordable mortgages. It comes as mortgage interest rates fall, following drops in the Bank of England (BoE) base rate. Stress tests are carried out by lenders to see if borrowers could cope with an uptick in their interest rate or if their income dropped. A host of lenders, including Halifax, Santander and Barclays, have tweaked their stress tests in recent months. Santander said it could allow home buyers to borrow up to £35,000 more. But relaxing stress testing rules, while making it easier for buyers to get a mortgage, could see house prices rise as demand increases. The Sun's James Flanders explains how to find the best deal on your mortgage What is happening with mortgage rates? Mortgage rates have been falling steadily across the UK following a number of Bank of England (BoE) base rate cuts. Trump's "Liberation Day" blitz of tariffs also led to a number of lenders slashing interest rates below 4%. The base rate is the rate the BoE charges to high street banks and lenders when they borrow money. If it goes up, it means mortgage rates tend to rise too, as well as savings rates. When it falls, it sees the opposite happen. The base rate currently sits at 4.25%, having been lowered from 4.5% earlier this month, and down from 5.25% in summer last year. According to the average two-year fixed-rate mortgage is 5.12% today, compared to 5.93% a year ago. The average five-year fixed residential mortgage rate today is 5.09%. This is down from 5.50% a year ago. More base rate cuts are expected this year. It's worth bearing in mind, when your mortgage rate falls is dependent on the type you have. Those on tracker and standard variable rate (SVR) mortgages tend to see their rates fall first. However, if you're on a fixed rate, you won't feel the impact of any rate changes until your deal ends. If you are coming to the end of a fixed deal, most lenders let you lock in a new rate up to six months beforehand, which can be worth doing. If rates fall after you agree a new deal, some lenders will let you sign a new one at a lower rate.
Yahoo
a day ago
- Business
- Yahoo
UK mortgage approvals drop for third month in a row
The number of mortgages approved by UK lenders for home purchases dropped more than anticipated in April as the end of a tax break on stamp duty cooled demand, according to data from the Bank of England. Net residential mortgage approvals fell for the third consecutive month, declining by 3,100 to 60,500, below economists' expectations. In contrast, remortgaging activity picked up, with approvals for switching to a new lender rising by 1,600 to 35,300 in April, following a similar increase the previous month, according to the BoE's Money and Credit report. A stamp duty holiday ended in March, with recent figures showing there was a stampede to get sales over the line before the deadline, followed by a transactions dip. HM Revenue and Customs (HMRC) figures published last week showed an estimated 64,680 house sales took place in April – 64% lower than the 177,440 reported in March. The study indicated the figures had been affected by changes to stamp duty rates which apply in England and Northern Ireland. The average interest rate on newly drawn mortgages edged down slightly to 4.49% in April, but the cost of existing home loans rose slightly to 3.86% from 3.84% in March. Richard Donnell, executive director at Zoopla, attributed April's dip in approvals in part to the timing of Easter. 'A slowdown in demand for mortgages in April reflects the impact of a late Easter,' he said. 'We expect mortgage data for May to increase in line with a pick-up in new sales being agreed, which are running at their highest level for four years.' Read more: UK house prices rise in May as higher wages, low unemployment boost market Donnell also pointed to easing lending standards as a contributing factor: 'A key factor is also lenders relaxing affordability tests, which is delivering the average home buyer up to 20% more borrowing capacity compared to a few months ago. We expect a busy June as buyers look to secure sales before the summer holidays kick in.' Net borrowing of mortgage debt decreased sharply by £13.7bn to -£800m in April. That followed an increase in net borrowing by £9.7bn to £13bn in March, as buyers rushed to complete transactions ahead of the new stamp duty charges that took effect in April. Gross lending tumbled to £16.9bn in April from £39.9bn the previous month — the steepest monthly decline since June 2021. Gross repayments also fell, to £18.4bn from £23.7bn. Nathan Emerson, chief executive of industry body Propertymark, suggested that affordability concerns were weighing on buyer sentiment. 'As the global economy continues [to] find a new balance, many people are acutely aware there could be challenges ahead regarding overall affordability when approaching the buying and selling process,' he said. 'We are starting to see more competitive mortgage deals from key lenders, but the eligibility criteria in some cases remains extremely rigid and limited. Many people may have also been temporarily deterred from potentially moving house following stamp duty threshold hikes across England and Northern Ireland from the start of April.' The BoE data also showed a rise in consumer credit borrowing, which increased from £1.1bn in March to £1.6bn in April. The annual growth rate in consumer credit climbed by 0.5 percentage points to 6.7%. The effective interest rate on new personal loans rose to 8.69%, up 29 basis points on the month. Read more: FTSE 100 LIVE: Markets slide as China accuses US of violating trade deal Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: 'Borrowers with a collection of debts they are struggling to repay would be wise to plan an exit strategy from a life on credit. Whether it's a redraft of a household budget or seeking guidance from a free debt counsellor, getting on top of liabilities is key to long-term financial resilience and being able to save for life's major goals such as retirement. "The sharp jump in household bills in Awful April served as a reminder that living costs can quickly spiral upwards, which is why getting to grips with personal finances is key.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
UK mortgage approvals drop for third month in a row
The number of mortgages approved by UK lenders for home purchases dropped more than anticipated in April as the end of a tax break on stamp duty cooled demand, according to data from the Bank of England. Net residential mortgage approvals fell for the third consecutive month, declining by 3,100 to 60,500, below economists' expectations. In contrast, remortgaging activity picked up, with approvals for switching to a new lender rising by 1,600 to 35,300 in April, following a similar increase the previous month, according to the BoE's Money and Credit report. A stamp duty holiday ended in March, with recent figures showing there was a stampede to get sales over the line before the deadline, followed by a transactions dip. HM Revenue and Customs (HMRC) figures published last week showed an estimated 64,680 house sales took place in April – 64% lower than the 177,440 reported in March. The study indicated the figures had been affected by changes to stamp duty rates which apply in England and Northern Ireland. The average interest rate on newly drawn mortgages edged down slightly to 4.49% in April, but the cost of existing home loans rose slightly to 3.86% from 3.84% in March. Richard Donnell, executive director at Zoopla, attributed April's dip in approvals in part to the timing of Easter. 'A slowdown in demand for mortgages in April reflects the impact of a late Easter,' he said. 'We expect mortgage data for May to increase in line with a pick-up in new sales being agreed, which are running at their highest level for four years.' Read more: UK house prices rise in May as higher wages, low unemployment boost market Donnell also pointed to easing lending standards as a contributing factor: 'A key factor is also lenders relaxing affordability tests, which is delivering the average home buyer up to 20% more borrowing capacity compared to a few months ago. We expect a busy June as buyers look to secure sales before the summer holidays kick in.' Net borrowing of mortgage debt decreased sharply by £13.7bn to -£800m in April. That followed an increase in net borrowing by £9.7bn to £13bn in March, as buyers rushed to complete transactions ahead of the new stamp duty charges that took effect in April. Gross lending tumbled to £16.9bn in April from £39.9bn the previous month — the steepest monthly decline since June 2021. Gross repayments also fell, to £18.4bn from £23.7bn. Nathan Emerson, chief executive of industry body Propertymark, suggested that affordability concerns were weighing on buyer sentiment. 'As the global economy continues [to] find a new balance, many people are acutely aware there could be challenges ahead regarding overall affordability when approaching the buying and selling process,' he said. 'We are starting to see more competitive mortgage deals from key lenders, but the eligibility criteria in some cases remains extremely rigid and limited. Many people may have also been temporarily deterred from potentially moving house following stamp duty threshold hikes across England and Northern Ireland from the start of April.' The BoE data also showed a rise in consumer credit borrowing, which increased from £1.1bn in March to £1.6bn in April. The annual growth rate in consumer credit climbed by 0.5 percentage points to 6.7%. The effective interest rate on new personal loans rose to 8.69%, up 29 basis points on the month. Read more: FTSE 100 LIVE: Markets slide as China accuses US of violating trade deal Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: 'Borrowers with a collection of debts they are struggling to repay would be wise to plan an exit strategy from a life on credit. Whether it's a redraft of a household budget or seeking guidance from a free debt counsellor, getting on top of liabilities is key to long-term financial resilience and being able to save for life's major goals such as retirement. "The sharp jump in household bills in Awful April served as a reminder that living costs can quickly spiral upwards, which is why getting to grips with personal finances is key.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Sub-4% mortgage rates on the rise as Bank of England cuts interest rates
Every major lender is now offering deals under 4%, giving some respite for borrowers amid a mini price war among mortgage providers as the Bank of England (BoE) cuts interest rates. The average rate for a two-year fixed mortgage stands at 4.79%, lower than last week's 4.99%, while five-year fixed deals average 5.04%, below last week's 5.24%, according to data from Uswitch. The Bank of England has cut interest rates from 4.5% to 4.25%, meaning the average homeowner on a tracker mortgage will see their monthly repayments fall by nearly £29, after the quarter-point snip to the base rate. UK Finance said homeowners on tracker deals will typically see their monthly repayments reduce by £28.97, based on balances outstanding. This could add up to a saving of nearly £350 over the course of a year. People on a standard variable rate (SVR) mortgage could see their monthly payments fall by £13.87, assuming that their lender passes on the base rate cut in full, which could add up to a saving of nearly £170 over a year. The primary inflation measure, the Consumer Price Index (CPI), stood at 2.6% in the 12 months to March 2025, a slight decrease from the previous month. That means that prices have been rising at the slowest pace since December and are closer to the BoE's 2% target. This week, Santander (BNC.L) has cut rates deeper into sub-4% territory, as has Barclays (BARC.L). Meanwhile, Nationwide (NBS.L) is making it easier for people to secure a mortgage by reducing its affordability stress rates. Read more: UK hotspots with highest demand for homes with garages The UK financial watchdog has announced plans to water down its rules on mortgage lending to make it faster and cheaper for people to get home loans. UK lenders will be freed from having to provide formal advice or to carry out full affordability assessments when arranging mortgages for many customers, under plans outlined by the Financial Conduct Authority (FCA). Skipton Building Society has launched its Delayed Start Mortgage, which allows new homeowners to postpone repayments for the initial three months, providing "breathing space" to manage the additional expenses that come with purchasing a home. Meanwhile, the number of mortgaged homeowners having their home repossessed jumped by nearly a fifth in the first quarter of this year, compared with the previous three months, according to figures from a banking and finance industry body. Some 1,220 homeowner repossessions were recorded by UK Finance in the first quarter of this year, marking an 18% rise compared with the last three months of 2024. There were also 810 buy-to-let home repossessions in the first quarter of this year, marking a 16% rise on the previous quarter. UK Finance said that, although repossession numbers increased, they remain low compared with the longer-term. It said that the 2,030 homeowner and buy-to-let repossessions in the first quarter of 2025 was significantly lower than the 13,200 repossessions seen in the first quarter of 2009, during the global financial crisis. Current repossessions predominantly relate to older mortgages, the report said, with more than two-thirds of repossessions relating to mortgages arranged at least a decade ago. HSBC (HSBA.L) has a 3.93% rate for a five-year deal, unchanged from the previous week. For those with a Premier Standard account with the lender, this rate is 3.90%. Looking at the two-year options, the lowest rate is 3.91% with a £999 fee, also unchanged. Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit. HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are much higher, with a two-year fix coming in at 4.99% or 4.94% for a five-year fix. This is because their financial situation and deposit size determine the rate someone can get. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky. NatWest (NWG.L) has a five-year deal coming in at 3.88% with a £1,495 fee. No changes from last week. The cheapest two-year fix deal is 3.88%, again untouched from the previous week. In both cases, you'll need at least a 40% deposit to qualify for the rates. At Santander (BNC.L), a five-year fix is 3.99% for first-time buyers, lower than the previous 4.10%. It has a £999 fee, assuming a 40% deposit. For a two-year deal, customers can also secure a 3.89% offer, with the same £999 fee, which is also lower than the previous 3.94%. Read more: UK economy grows 0.7% in first quarter of the year Santander has also introduced mortgage products tailored to first-time buyers with large loans. These feature two- and five-year fixed-rate deals at 60% LTV, albeit with a higher £1,999 product fee. Barclays (BARC.L) was the first among major lenders to bring back under-4% deals and it has cut them again, with a five-year fix at the lender at 3.89%, lower than last week's 3.93%. For "premier" clients, this rate drops to 3.88%. The lowest you can get for two-year mortgage deals is 3.87%, also a reduction from the previous 3.92%. Barclays has launched a mortgage proposition to help new and existing customers access larger loans when purchasing a home. The initiative, known as Mortgage Boost, enables family members or friends to effectively "boost" the amount that can be borrowed toward a property without needing to lend or gift money directly or provide a larger deposit. Under the scheme, a borrower's eligibility for a mortgage can increase significantly by including a family member or friend on the application. For example, an individual with a £37,500 annual income and a £30,000 deposit might traditionally be able to borrow up to £168,375, enabling them to purchase a home priced at around £198,375. However, with Mortgage Boost, the total borrowing potential can rise substantially if a second person — such as a parent — joins the application. In this case, if the second applicant also earns £37,500 a year, the combined income could push the borrowing limit to £270,000, enabling the buyer to afford a home worth up to £300,000. Nationwide's (NBS.L) lowest mortgage rate now stands at 3.84%, which is available to new and existing customers who are looking to move to a new home. This rate is available on both the two-year and five-year fixed rate products. For the first time since September 2024, Nationwide will be offering sub-4% rates for first-time buyers. The lowest first-time buyer rate is 3.94% and available on a two-year fixed rate product at 60% loan-to-value (LTV) with a £1,499 fee. First-time buyers can also get 3.99% on the same 60% LTV, two-year fixed rate product but with a lower £999 fee. For a five year fix, first-time buyers are currently looking at 4.09%. Read more: Rightmove and Nationwide launch property lending checker Carlo Pileggi, Nationwide's senior manager, mortgages, said: 'We're pleased to be able to make our third rate cut in three weeks as we strive to remain one of the most competitive lenders in the market. This latest round of changes includes us offering sub-four percent rates for first-time buyers, as well as reducing rates across our Helping Hand mortgages, which enable eligible first-time buyers to borrow up to six times their income up to 95% loan-to-value.' The lender has announced it is adjusting its mortgage affordability calculation by reducing its stress rates by between 0.75 and 1.25 percentage points, helping applicants to borrow more — whether buying a first home, moving or remortgaging. Applicants will be able to borrow, on average, £28,000 more from today, however in some remortgage cases customers could borrow up to £42,600 more. Nationwide is reducing both its standard stress rate and the rate applied to eligible first-time buyers and home movers fixing their deal for at least five years. Halifax, the UK's biggest mortgage lender, offers a five-year rate of 3.93% (also 60% LTV), unchanged from the previous week. The lender, owned by Lloyds (LLOY.L), offers a two-year fixed rate deal at 3.87%, with a £999 fee for first-time buyers, which is also unchanged. It also offers a 10-year deal with a mortgage rate of 4.78%. Read more: How to choose where to live as you get older The lender has enhanced its five-year fixed mortgage products by increasing borrowing capacity. This improvement allows borrowers to access up to £38,000 more, enabling them to secure larger mortgages based on individual incomes. Rachel Springall, finance expert at Moneyfacts, said: "The flourishing choice of low-deposit mortgages will no doubt be welcomed by borrowers who are either looking to remortgage or are a first-time buyer. "The government has been clear that it wants lenders to do more to boost UK growth, and so a rise in product availability for aspiring homeowners is a healthy step in the right direction." Amid this mini price war between mortgage providers, prospective homeowners have some better options. NatWest's (NWG.L) 3.88% is currently the cheapest deal for five-year fixes, while Halifax and Barclays' 3.87% comes out on top for two-year fixes among the top banks, though both require a 40% deposit. The average UK house price is £297,781, so a 40% deposit equates to about £120,000. A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s. Read more: Savers making costly 'bad decisions' around pensions as 15 million risk retirement poverty Lender April Mortgages offers buyers the chance to borrow up to six times their income on loans fixed for five to 15 years, from a deposit of 5%. Both buying alone and those buying with others can apply for the mortgage. As part of the independent Dutch asset manager DMFCO, the company offers interest rates starting at 5.20% and an application fee of £195. Skipton Building Society has also said it would allow first-time buyers to borrow up to 5.5 times their income to help more borrowers get on the housing ladder. Leeds Building Society is increasing the maximum amount that first-time buyers can potentially borrow as a multiple of their earnings with the launch of a new mortgage range. Aspiring homeowners with a minimum household income of £40,000 may now be able to borrow up to 5.5 times their earnings. Mortgage holders and borrowers have faced record-high repayments in recent years, as the Bank of England's base rate has been passed on by banks and building societies. According to UK Finance, 1.3 million fixed mortgage deals are set to end in 2025. Many homeowners will hope the Bank of England acts quickly to cut rates more aggressively. At the same time, savers will likely root for rates to remain at or near their current levels. Read more: How rising house prices can impact your finances How to negotiate house prices What are green mortgages and are they the future?Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
