Bank of India

State Bank of India shock move to offer 3.9% interest rates on mortgages – Bond Adams overview

Nationwide Building Society and TSB have both cut selected residential fixed rates, effective today.  The Nationwide are offering a five-year fixed-rate deal for purchase at sub-5%.

Nationwide has made cuts of up to 0.31 percentage points. Now they are offering a five-year fixed rate for new customers purchasing a property at 4.94% with a £999 fee (75% LTV). Its first-time buyer deal at 90% LTV has been cut to 5.38%, also with a £999 fee. Residential remortgage deals now start from 5.7% for a two-year fix or 5.2% over five years (both 60% LTV), with a £999 fee.

TSB has cut selected residential rates for new business by up to 0.25 percentage points. Its two-year fixed rate for home movers is now 5.74% (75% to 80% LTV) with a £995 fee. Five-year fixed rates for home movers now start from 5.09% (60% LTV). The lender’s three-year fixed rates for remortgage have been cut by up to 0.2 percentage points. They start from 5.64% (60% LTV) with a £995 fee.

  • Accord, the broker-only lending arm of Yorkshire building society, has cut residential fixed rates. In particular, lowering the cost of deals for borrowers with a smaller deposit or equity by up to 0.46 percentage points. It is offering a five-year fix at 95% LTV (under the Deposit Unlock scheme for new build purchase) at 5.64% with a £495 fee. Its five-year fix at 75% LTV is now 5.21% with a £1,495 fee.
  • Mpowered Mortgages has cut residential fixed rate mortgages for new business. Among its range it is offering a two-year fixed rate at 5.66% (60% LTV) for purchase, with a £1,295 fee and a five-year fee-free deal for remortgage at 5.49% (75% LTV).

State Bank Of India 3.9% Offer Shocks Market

State Bank of India has launched a two-year fixed-rate deal for new buy-to-let customers at 3.9%.
The deal, which requires a 50% cash deposit or equity, has a hefty 5% arrangement fee. But brokers believe it will be a mouth-watering option for many BTL investors.

NatWest is cutting selected residential and buy-to-let (BTL) fixed rates and tracker deals from tomorrow (21 September). It last cut rates on 8 September. For residential remortgages, its two and five-year fixed rates are cut by up to 0.2 percentage points. BTL purchase rates are cut by up to 0.31 percentage points, while remortgage rates are cut by up to 0.21 percentage points. A range of product transfer deals (for existing customers looking for a new rate) will also be reduced. The bank is offering a two-year fix for new remortgage customers at 5.84% (60% LTV) with a £995 fee and a five-year equivalent deal at 5.29%

The move by State Bank of India is part of rate cuts across two and five-year fixed rates for BTL borrowers. It follows a number of lenders who cut five-year fixed rates to under 5% last week for residential borrowers. It is the first time rates have been this low in many months.

Fixed rates have been falling due to falls in ‘swap’ rates. Those are the wholesale interest rates at which banks lend to each other. Swap rates are used by banks to price fixed rate mortgage deals.

What does it mean?

It suggests the market believes interest rates are close to their peak for this cycle. The Bank of England Governor Andrew Bailey recently commented that this was likely to be the case. Although another rate rise is possible when the Bank’s Monetary Policy Committee meets to discuss rates.

  • Bank of Ireland is cutting fixed rates for new residential and buy-to-let customers, available through brokers, from tomorrow (21 September). It is offering a two-year fixed rate for residential remortgage at 5.61% (75% LTV) with a £1,495 fee and a five-year fix at 5.32% (also 75% LTV) with a £995 fee.
  • Platform, the specialist lending arm of Co-operative Bank, has withdrawn its residential and BTL deals for new business. At the same time, it has said it will increase rates on product transfer deals by up to 0.1 percentage points. Aldermore is thought to be preparing a takeover of Platform’s parent bank, the Co-op.
  • Principality building society is withdrawing its two-year fixed rates for new customers at 75% and 90% loan to value, available through brokers, from 25/09.

For all your conveyancing and property needs, contact Bond Adams Solicitors. For expert advice from a firm operating since 2007 at or call on 01162858080 or visit our website.

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