Two major lenders slash rates as borrowers set to cash in on 'summer mortgage war'

HSBC and Santander have joined other mortgage lenders including Virgin and The Mortgage Works by cutting their rates.

Mortgage brokers say they expect more high street lenders, such as the Halifax and Nationwide, to cut rates soon, with one claim "it's starting to feel like we could have a price war through the summer months".

From Thursday Santander will reduce mortgage rates by up to 0.21 percentage points while HSBC has cut some of its rates by up to to 0.24 percentage points.

HSBC's largest cut applies to anyone wanting to fix their mortgage rate for two years and has a deposit of 15%; customers with its Premier Banking account can take out a mortgage at 3.99% with a £999 fee.

Mortgage brokers told NewsPage that this week's reported drop in inflation could signal the start of a mortgage rate war.

David Stirling, director at said: "The week is heating up as Virgin and The Mortgage Works have announced rate cuts this afternoon. This follows moves by Santander, HSBC and other lenders earlier in the week. It now feels like only a matter of time before other major lenders like Nationwide and Halifax are compelled to respond and sharpen their pencils. With a Bank of England rate cut looking increasingly inevitable, the outlook for borrowers is, at least for now, decidedly positive."

Pete Mugleston, at commented: "With more and more lenders cutting rates, a trickle is fast becoming a flood, with a full-on rates war fast approaching. TMW's 0.25% cut is aggressive and suggests we might see similar cuts from other lenders in the coming weeks as they respond. Borrowers are the winners here as the market becomes more competitive, giving them more options and encouraging more people to jump into the market rather than sitting on the fence, trying to time the market."

Emma Jones, managing director at commented: "More lenders are now following the initial rate cuts that we saw last week and it's starting to feel like we could have a price war through the summer months. This is such good timing as many households will be coming out of their fixed rate deals over the summer. It's time to lock in something competitive if you are within six months of your current deal ending."

Jack Tutton, director at s said: "With the cost of borrowing for lenders continuing to fall, we should see this current trend continue as long as market costs continue to reduce. All of this is positive movement in the market is welcome news for home owners with a , who have struggled with higher rates. The hope is that the downward trend continues."

Daniel Hobbs, CEO at commented: "The good news for borrowers just keeps coming this week. Following this morning's lower than expected inflation number, most now expect a cut from the Bank of England when the Monetary Policy Committee meets next month. If that happens, all bets are off."

Imran Hussain, director at commented: "The more, the merrier. It's good to see Virgin and The Works cut rates for borrowers. Crucially, this is positive news not only for residential borrowers but also landlords. It's a great time to add heat to the market over the summer period. We can only hope this continues."

Rohit Kohli, Director at commented: "This is great news for borrowers. Virgin Money and TMW jumping in with rate cuts shows the gloves are off and lenders are now in an all-out battle for business. We're seeing some real momentum in the market, and borrowers have a golden window to secure better deals. But with so much uncertainty in the global economy, these rates may not stick around for long, so anyone considering a move should act fast before the next twist in the rate rollercoaster."