Can you benefit from the mortgage price war?

Mortgage lenders have started slashing rates in what is being dubbed the start of a mortgage price war. If you’re in a position to renew your mortgage, now might be the best time to secure a better deal and make monthly savings.

For personalised support and advice, speak with a reputable mortgage advisor today. Our team at Euxton Mortgages can explain how you might be able to get a cheaper mortgage deal amidst the emerging price war between lenders.

What is the mortgage price war?

Several of the UK’s biggest mortgage lenders have cut the interest rates on their fixed-rate and tracker mortgage deals. Other well-known lenders have signalled they will be doing the same. These mortgage providers are prepared to lower the cost of their mortgage deals in an attempt to attract new customers. With new deals coming to the market, now might be the best time to reassess your current mortgage deal and potentially remortgage to save money.

What’s causing the mortgage price war?

So, why have multiple banks and lenders decided to slash their mortgage interest rates? There might not be just one answer to this question.

On the one hand, there has been a significant dip in mortgage activity due to the increased cost of borrowing. When interest rates are high, the demand for property reduces along with buyers’ borrowing power. To counter a slower mortgage market, lenders need to make their products more attractive, which is possible by making mortgages cheaper.

On the other hand, the mortgage price war may be an indication of where lenders believe the market is heading. The rate of inflation has somewhat slowed down, meaning the Bank of England might not be as aggressive when increasing the base rate over the rest of the year as first predicted.

How long will the mortgage price war last?

The competition between lenders for a greater market share won’t last forever. With the Bank of England still expected to make further interest rate rises this year – albeit not as aggressively as in recent months - it’s worth considering your options already.

What’s the cheapest type of mortgage?

One of the most common questions among homeowners right now is what mortgage is the cheapest?

Variable-rate mortgages, including tracker mortgages, will remain cheaper than fixed-rate mortgages in the majority of situations. But many fixed-rate deals have been considerably reduced as part of the mortgage price war so it’s important to search the whole of the market against your needs and preferences.

A professional mortgage adviser can do this for you and may have access to exclusive deals. We at Euxton Mortgages search the whole of the market so clients don’t miss out on more favourable deals.

March 2023