Why would a bank cut tracker or fixed rates?

Burnley_Lad

Could anyone tell me why a bank would reduce tracker or fixed mortgage rates when a Bank of England decision to reduce the base rate is not expected? Thanks!

kingstreet

Competition between lenders for new business.

Thrugelmir

Availability of funds to the lender. Better to lend the money out than do nothing.

What's never known is actually how much business gets written at these rates.

Tracker rates could rise. Lender benefits.

Fixed rate. As it says on the tin. At a later date borrower switches to SVR or moves to new product. Lender is in control.

FormulaDriven

As well as the more commercial factors mentioned above, a five-year fixed rate is going to be based on the market expectation of average interest rates over the next five years. So even if the BoE are not expected to cut rates, if the market's view revises its view about how long it will be until BoE starts raising rates, then that will change the expectation of the average over the next few years.