Five lenders are reducing mortgage rates in response to the fallout from Donald Trump’s tariff announcements. MPowered Mortgages is among those cutting rates by up to 0.21 percentage points. Laith Khalaf, head of investment analysis for AJ Bell, shared his perspective on the situation.
Khalaf explained, “While Trump’s tariff announcement may have caused turmoil in the stock market, there’s a potential benefit for UK mortgage borrowers. As markets factor in the potential economic damage caused by the US tariffs, interest rate expectations are dropping. This is increasing the likelihood that the Bank of England will respond with interest rate cuts.”
Stuart Cheetham, CEO of MPowered Mortgages, commented on the recent changes: “Since Trump announced the ‘Liberation Day’ tariffs, we’ve seen a significant drop in swap rates, which has allowed us to lower our fixed-rate mortgage offerings. While these tariffs could harm the UK economy by driving up prices and placing more strain on households, there’s a silver lining for mortgage borrowers. They will likely see reduced rates in the coming week.”
However, Cheetham advised borrowers to seek independent financial advice before making decisions about mortgage deals. Meanwhile, Martin Temple, an economist for Leeds Building Society, shared his thoughts on the situation.
Temple observed, “The sharp declines in Asian, European, and US stock markets have led to a steep drop in the underlying interest rates used to price both mortgage and saving products in the UK.”
“For mortgage customers, this fall in rates is potentially welcome news,” said Martin Temple, an economist for Leeds Building Society. “We would expect these lower swap rates to start feeding through into reduced mortgage pricing over the next couple of weeks, especially if these falls are sustained.”
The sharp drop in swap rates has had a significant effect on the mortgage market. Swap rates are used by lenders to determine the interest rates they offer on mortgage products. When these rates decrease, it typically results in lower mortgage rates for borrowers. As a result, homeowners and prospective buyers may see more affordable options in the near future.
One of the lenders to act swiftly in response to these changes is TSB. The bank has reduced its mortgage rates by as much as 0.25 percentage points. This move is part of a broader trend that has been seen across the mortgage sector following recent fluctuations in the financial markets.
In a similar move, Coventry Building Society has also slashed its rates by up to 0.25 percentage points. The building society has made headlines by introducing a new deal with rates below the 4% mark. This is a significant milestone, as it provides more competitive options for those looking to secure a mortgage.
Clydesdale Bank, another key player in the market, has made even steeper cuts, lowering its rates by up to 0.64 percentage points. This reduction is one of the largest seen so far and offers a substantial opportunity for borrowers to lock in a lower rate on their mortgages.
Meanwhile, Gen H has joined the ranks of lenders making rate cuts, reducing its rates by up to 0.20 percentage points. Although this is a smaller reduction compared to other banks, it still reflects the ongoing trend in the market and is beneficial for those seeking to refinance or take out new mortgages.
With these changes in mind, borrowers are encouraged to act quickly, as further rate reductions are possible if the trend continues. The mortgage landscape appears to be shifting, and this may be an opportune time for homeowners and buyers to secure a more favourable deal before rates begin to rise again.
As always, financial experts recommend that borrowers seek independent advice when making decisions about mortgage deals. While the current rate cuts may offer some relief, it’s important to understand the full terms and implications of any mortgage agreement before committing to a new deal.
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