Britain’s biggest mortgage lender has joined rivals in announcing a new round of home loan rate cuts.
The Halifax has just announced that, from tomorrow, it is reducing rates on its 2- and 5-year home mover and first-time buyer products based on loans worth up to 90 percent of a property’s value.
Major banks and building societies have been playing a game of leapfrog with new home loan rate cuts being announced every few days as they battle to win new custom.
The cuts come on the back of reductions in so-called swap rates, which are the interest rates that financial institutions charge each other to lend money.
As of this morning, the 2-year Sonia swap was 3.91 percent, which is the lowest since March 2023 and lower than the 4.01 percent it dropped to at the start of the year.
Peter Stimson, Head of Product at MPowered Mortgages, said: “The 2-year swap, which 2-year fixed rate mortgages are priced off, is now at its lowest level for 18 months and is even lower than it was at the start of the year when lenders were cutting across the board. Five-year swaps are also falling.”
Darryl Dhoffer, Mortgage Broker at The Mortgage Expert, said: “As swaps fall, UK borrowers are striking gold. Lenders use these rates to set mortgage rates, so a falling swap is like a treasure chest opening up.”
Simon Bridgland, Director at Release Freedom, said details of the reductions by the Halifax will be made clear on Wednesday morning.
“It is anticipated that both 5-year and especially 2-year deals should see some good decreases up to and including 90 percent loan-to-value products, which is great news for borrowers either buying for the first time or moving home,” he said.
David Stirling, Independent Financial Advisor at Mint Mortgages & Protection, said: “It’s only Tuesday and another major lender has announced rate cuts. Halifax finally look to to be bringing their products closer in line with the competition.
“Although it’s not clear how much exactly these cuts will be, this can only be good news for home-movers and first-time buyers, following the cuts by TSB and Barclays yesterday. How long this will continue is unclear. Next week’s inflation figures could knock things either way.”
Ben Perks, Managing Director at Orchard Financial Advisers, said: “Halifax are keeping their hand close to their chest and using their best poker face as they announce reductions kicking in tomorrow.
“The rate war is hotting up and Halifax will unveil tomorrow morning just how eager they are for business. The lender is due a good cut and I’m hopeful they won’t disappoint as we start work tomorrow. Fingers crossed for a headline grabbing rate.”
Gabriel McKeown, Head of Macroeconomics at Sad Rabbit Investments, told Newspage: “It’s a game of ‘Simon Says’ in the mortgage world, and this time, he’s telling lenders to ‘keep cutting your rates’.
“With the Bank of England’s base rate remaining stable at 5 percent, the move suggests Halifax are relying on falling swap rates, which directly impact mortgage pricing more than the base rate itself. So, although the latest set of rate cuts light a path through the uncertainty for borrowers, the fog of economic instability is ever present.”
Dariusz Karpowicz, Director at Albion Financial Advice , said: “The Halifax are keeping the momentum going. This is definitely the right direction, with major lenders like Halifax, Barclays, and TSB all cutting rates this week.”
Justin Moy, Managing Director at EHF Mortgages, said: “Any rate cuts from the largest UK lender will always be newsworthy. Homemovers and first-time buyers are the main beneficiaries, so Halifax is helping more borrowers afford their ideal homes.
“We will likely see further base rate cuts in the coming months, as the margin between the base rate and equivalent fixed rates is ever-widening and needs to narrow soon.”
