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Rate cuts trickle through as two-year swaps fall by 0.5%

Lenders have started to cut mortgage rates after two-year swap rates fell by 0.5 per cent to under 6 per cent this week.

Two-year swaps fell to 5.96 per cent on Tuesday but are still the most expensive, with 10-year swaps at 5.49 per cent. Rates were as high as 6.49 per cent in the middle of June compared with 5.84 per cent at the start of the same month.

Nationwide this week cut some of its two-year fixed-rate and tracker deals by up to 0.27 per cent.

Abbey has cut 0.14 per cent off its two-year fixed deal up to 75 per cent loan to value.

The Mortgage Practitioner sole trader Danny Lovey says: “Why haven’t other lenders reduced their rates? As far as I can see, rates are still as high as a couple of weeks ago despite the fall in swap rates.”

John Charcol senior technical manager Ray Boulger believes that more lenders will drop their rates.

He says: “We have had quite a decline in swap rates over the last three weeks, with all swaps now under 6 per cent. That is quite encouraging. I do expect to see a few more lenders cutting rates.”

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