UK's 'big four' banks expected to follow HSBC, NatWest in mortgage rate cuts

UK's 'big four' banks expected to follow HSBC, NatWest in mortgage rate cuts
Credit: © Reuters.

Major UK lenders including Lloyds Banking Group (LON: LLOY ), Barclays (LON: BARC ), Nationwide, and Santander (BME: SAN ) are expected to follow in the footsteps of NatWest and HSBC by reducing their mortgage rates, according to reports from Friday. The anticipated move comes on the heels of a series of rate reductions by the latter two banks, which have been cutting their mortgage rates for six weeks.

HSBC launched its first-ever 40-year mortgage last week, a move seen as a significant step in making home ownership more affordable. The longer-term mortgage could help lower monthly repayments and is available to a variety of applicants, including first-time buyers. Andrew Matson (NYSE: MATX ), Head of Mortgages at HSBC UK, underscored the bank's commitment to supporting aspiring homeowners. "By extending the mortgage term we aim to help make mortgages more manageable with lower monthly repayments and homeownership a reality for our customers," said Matson.

This week also saw NatWest cut its mortgage rates for the second time, with reductions of up to 0.30% for both new and existing customers. Mortgage brokers have interpreted these moves as a sign that other major lenders will follow suit. Justin Moy, managing director of Essex-based EHF Mortgages, said: “I am sure others will follow the lead from HSBC and NatWest later this week.”

Lewis Shaw, owner of Shaw Financial Services, echoed this sentiment. “There’s every chance we could see the remaining big four come to the party this week, too. It would appear that lenders are struggling to get new business, and the rate tap is the only tool they can turn to,” Shaw said.

Stephen Perkins, managing director of Yellow (OTC: YELLQ ) Brick Mortgages, compared the ongoing reductions to an avalanche. “No doubt there will be more of these reductions over the week, as all lenders follow in a conga line,” Perkins said.

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