Lenders are continuing to reduce the cost of mortgage deals, signalling that the cost of borrowing may have neared or even reached the top of the rate-hike cycle. From the 4 August Santander reduced fixed rates across its entire range of residential and buy-to-let deals for new business by up to 0.39 percentage points. For existing customers transferring products, residential and buy-to- let fixed rates will reduce by up to 0.25 percentage points, and some tracker rates by up to 0.60 percentage points. Coventry Building Society has lowered residential rates by up to 0.63 percentage points and on selected buy-to-let deals by around 0.55 percentage points, also from today. The lender has also introduced new three-year fixed rate options for residential customers Clydesdale Bank cut the cost of residential and buy-to-let deals on the 3rd August by up to 30 percentage points.

Rate reductions also apply to higher loan-to-value products, such as the lender’s two-year fix now priced at 6.20% for a 10% deposit. The Mortgage Works – a subsidiary of Nationwide – is also slashing buy-to-let rates by up to 0.95 percentage points across one, two, five and 10-year deals, from today. The lenders follow in the wake of HSBC, Barclays, and NatWest, all of which cut the cost of fixed rates in recent days and weeks. Last week, the Bank of England raised interest rates from 5% to 5.25%. However, the latest rise – the 14th in succession by the Bank – is expected by some commentators to represent the peak of the current rate-rise cycle. Even if the Bank Rate rises to 5.5% or 5.75% by the end of the year, mortgage lenders are believed to have ‘priced-in’ the increases already as far as their own lending rates are concerned.