Barclays has announced that from tomorrow it is cutting the rates on many of its Woolwich mortgage deals. Some rates will be cut by up to 0.32%, and it is also launching new capped rate deals aimed at people looking to switch their mortgage before the Bank of England Base Rate rises.
Also released today were the minutes from the Bank of England’s rate-setting meeting earlier this month when the Monetary Policy Committee voted to keep rates on hold at 0.5% for the 25th consecutive month. Three of the nine members voted for a rate rise, including one who voted for a 0.5% increase, but the other six voted to keep rates on hold.
At the beginning of this year, after a surprise hike in inflation, many economists were predicting a rise in interest rates in May, but this is now looking very unlikely after inflation fell back down to 4% in March.
Expectations are now for a rate rise later in the year and this has resulted in some lenders reducing the rates on their mortgage deals. As well as Barclays, Skipton Building Society is also cutting some rates tomorrow, by up to 0.5% and last week, Nationwide cut the cost of its 3-year fixed rate mortgages by up to 0.20%.
ING Direct had a slightly different approach last week by removing the application fees on all its fixed rate deals.
The Council of Mortgage Lenders announced today that gross mortgage lending rose in March by 21% (albeit from a low level in February). It also said that lenders expect the availability of mortgage credit to improve over the next few months which should be good news for both home buyers and those looking to switch their mortgage to a new deal.