Three big lenders cut mortgage rates for second time in two weeks

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Better than expected inflation data allows banks to ease rate rises.

Article originally published by The Telegraph. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

09 Aug 2023

Three of Britain’s biggest lenders have cut mortgage rates for the second time in two weeks.

Nationwide announced a reduction of up to 0.55 percentage points – its largest since February – taking effect on Wednesday.

TSB will also cut rates by up to 0.55 points from Friday, while HSBC said its rates would be lowered on Wednesday.

Mortgage costs still remain high, with the average two-year rate at 6.84pc, largely unchanged from 6.83pc two weeks ago, according to data firm Moneyfacts.

The average five-year rate has edged up slightly from 6.34pc to 6.35pc during the same period.

Some lenders have begun cutting rates off the back of better-than-expected inflation data last month.

Inflation eased to a 16-month low of 7.9pc in the year to June. This was down from 8.7pc in May and well below the 8.2pc expected by economists.

Markets are now pricing in a peak Bank Rate of between 5.75pc – down from previous predictions of 6.75pc.

However, the Bank of England signalled last week