Mortgage rates slashed on 100 deals as banks fight to 'poach borrowers from competitors'

Mortgage rates have been slashed on 100 deals as banks have been thrown into chaos as they try to poach borrowers from their competitors.

Mortgage rates have been cut on 100 deals at HSBC by 0.1 percentage points and Santander has cut a number of its fixed-rate mortgages by as much as 0.59 percentage points.

Yorkshire Building Society also cut its fixed-rate mortgages by as much 0.75 percentage points.

Santander have also announced a two-year deal at 4.84pc, making one of the cheapest on the market at the moment.

Mortgage rates yesterday fell to their lowest in three months as lenders continued to cut the cost of deals in an attempt to attract customers in the market.

Adrian Anderson from mortgage broker Anderson Harris, urged people to renegotiate with their banks or brokers if they had been quoted for a remortgage in the upcoming months.

He said: “This is going to be the year of banks trying to poach borrowers from competitors. It is going to be difficult for them to know what their lending pipeline is going to be this year given the change of direction in the property market.

Speaking to the Telegraph he added: “Rates will keep dropping, so if you were quoted a rate in the past few months for an upcoming remortgage, then you absolutely should be revisiting your broker or bank to renegotiate.”

The average two-year fixed rate is now 5.58 per cent, meaning the banks’ attempts to poach competitors’ customers has caused them to drop to their lowest since October 2 when they were 5.43 per cent.

It comes as the Office for National Statistics (ONS) said the rate of Consumer Prices Index (CPI) inflation fell to 10.5 per cent in December from 10.7 per cent.

Earlier this week, Governor of the Bank of England Andrew Bailey said mortgage debt and home repossessions are much lower now than during previous financial crises.

He told the Treasury Committee: “Overall mortgage debt service levels are lower than they were than at points in history when we had stress – before the financial crisis and in the early nineties.

“However, I do recognise that one of the big distinctions between now and some of the points in the past is that we are in a cycle of rising interest rates.”