TSB slashes mortgage rates after Barclays and Virgin in ‘big week for borrowers’ | Personal Finance | Finance
TSB Bank has announced a new raft of mortgage rate cuts today in more “positive” news for borrowers.
As of this morning, the Bank has reduced interest rates across selected residential, buy-to-let, product transfer and additional borrowing products by up to 0.2 percent.
Brokers have praised the move, speculating that it, along with other lenders’ recent rate cuts, could indicate the direction of the next Bank of England Base Rate decision.
This speculation arises ahead of the release of new inflation data by the Office for National Statistics (ONS) on Wednesday, a key metric considered by the central bank when deciding on interest rate changes.
Inflation increased by 2.8 percent in the 12 months to May 2024, which means rates are edging closer to the bank’s Government-set target of two percent.
Ben Perks, managing director at Orchard Financial Advisers said: “TSB shaving their rates is welcome news to receive on a Monday morning.
“It’s a big week for borrowers with the inflation data, which should give us a concrete indication of whether a Bank of England base rate reduction is on the cards in August.”
Rohit Kohli, director at The Mortgage Stop said: “If you needed something to make you smile after Sunday night’s disappointment, then this is it.
“TSB has delivered further reductions for borrowers, which will help to soothe hangovers. The consensus appears to be inflation to hold at two percent and, if that’s the case, the pressure will be on the Bank of England to deliver a rate cut in August.”
Simon Bridgland, director at Release Freedom added: “Great to see the week start off with some good news from TSB.
“The sombre mood of a nation licking its wounds from last night’s defeat while still waiting on a Base Rate reduction will be lifted slightly by these reductions.
“This is likely to be seen again throughout the week as more lenders follow suit. The regular flow of rate reductions has been keeping the market pretty positive as it holds on for the inevitable base rate reduction. Unfortunately, that first cut seems to be drifting further away.”
Accord Mortgages, which is part of Yorkshire Building Society, slashed interest rates across its products by up to 0.25 percent – the second round of reductions in just one week.
Barclays, Virgin and Clydesdale Bank also announced a spate of mortgage rate reductions last week, which brokers suggested could provide a “strong indication” that the Bank could cut interest rates soon.
Ranald Mitchell, director at Charwin Mortgages said: “Football may not be coming home, but TSB’s latest mortgage rate reductions are making mortgage seekers and mortgage holders the real winners this summer.
“With rates continuing to fall, there’s finally something to cheer about. It’s a golden opportunity for homebuyers to score big in the housing market.”
