NatWest and Nationwide Join Other Major Lenders in Slashing Fixed Mortgage Interest Rates, Betting on Decline in Inflation

NatWest, Nationwide, and Coventry Building Society, along with other major UK lenders, have lowered interest rates on fixed mortgage deals as they anticipate a drop in inflation.

Barclays and Lloyds Banking Group, among the six largest lenders in the country, have also reduced their rates, marking the fourth consecutive week of declining mortgage prices.

Yesterday, Barclays and Yorkshire Building Society cut rates by up to 0.61 percentage points on residential fixed-rate mortgages.

The latest official inflation figures released today indicate a potential respite for households from escalating prices.

In June, inflation dropped to a 15-month low, and it is expected to have decreased further in July.

However, the Bank of England is expected to continue raising interest rates, having recently raised rates to a 15-year high of 5.25%. This suggests that mortgage rates are unlikely to decline every week.

Prime Minister Rishi Sunak stated that there is “light at the end of the tunnel” in his plan to reduce inflation and that lowering inflation is the best way to decrease interest rates.

There have been concerns about a slowdown in the housing market due to the cost of living crisis, prompting providers to reduce prices in response to increased competition for favorable deals.

This news of rate reductions will be welcomed by 1.3 million borrowers whose existing fixed-rate mortgage deals are ending this year, as they have been anxious about facing a significant increase in mortgage costs.