United Kingdom

Instant drop in mortgage rates after Rishi Sunak appointed prime minister

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Some lenders have reduced rates by half a percentage point today. Accord Mortgages has reduced rates across its range. Its low-deposit mortgages, which are typically aimed at first-time buyers, have seen the biggest reductions of up to 0.53 percentage points.

Santander has also reduced rates on its fixed-rate mortgages by between 0.05 percentage points and 0.5 percentage points, while HSBC has cut rates on its tracker mortgages by between 0.09 percentage points and 0.22 percentage points.

Aaron Strutt of broker Trinity Financial said the rate falls were an early indication that the mortgage market was calming down after recent economic troubles.

“After so many banks and building societies either pulled out of the market or dramatically increased their fixed rates, it is good to see lenders lowering their prices again,” he said. “The cost of funding has come down so we expect more rate reductions over the coming days.”

However, he warned the reductions may only be temporary as the Bank Rate is widely expected to rise when the Bank of England meets next Thursday.

Mr Strutt said: “It is possible rates will come down only to go back up again next week.”