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Some fixed rates fall mid-withdrawal week: Moneyfacts

Despite this week's headlines about price withdrawals and price hike plans, some fixed-rate interest rates continued to fall, albeit slightly.

The average two-year bond fell by 0.2%, according to the latest statistics from Moneyfacts. However, the three-, five-, and 10-year revised averages were unchanged from last week.

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Stocks that saw their fixed rates cut significantly this week include Barclays Mortgage by up to 0.50%, Virgin Money by up to 0.20% and TSB by up to 0.10%.

However, Santander was one of the financiers that withdrew some of its low-interest five-fix deals from the sale.

Some building societies lower their rates. Newcastle Building Society up to 0.95%, Progressive Building Society up to 0.41%, Leek Building Society up to 0.35% West Brom Building Society up to 0.25%, Furness Building Society up to 0.20%, Chorley Building Society up to 0.25% Principality Building Society up to 0.20%, up to Increased by 0.11%.

In contrast to the interest rate reduction, Coventry Building Society has increased selected interest rates by up to 0.25%.

Rachel Springall, financial expert at Moneyfacts, said: “The mortgage market has seen positive developments over the past few months, but we have seen an increase in swap rates in recent days.

“Uncertainty around future interest rates, including mixed messages from the Bank of England regarding the benchmark rate, combined with broader economic uncertainty, will impact lenders’ pricing decisions.

“Fixed mortgage rates typically move relatively close to swaps, so volatility can be an indicator of the next move in interest rates, but it is difficult to determine how this will affect the market as a whole. It may be too early.

“However, each financial institution has its own year-end targets to consider and may choose to hold firm if prices are not too low in the current market. Borrowers should also be aware that even if there is a sudden change, it is just a change and may not reflect what will happen in the coming months. Independent advice must be obtained to evaluate the transaction.”

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