Price wars: four of Britain’s biggest lenders have slashed mortgage rates
Halifax has been announced as the latest bank to cut rates on some of its fixed mortgage deals, easing pressures on hard-pressed homeowners.
Starting tomorrow, Halifax, part of Lloyds Banking Group – the UK’s biggest mortgage lender – is reducing rates by up to 0.71 percentage points, which means a five-year fixed rate currently priced at 6.10% will be offered at 5.39%.
In addition to Halifax reducing their rates, other banks such as HSBC, Nationwide and TSB have cut some prices. The news has come as the Bank of England recently announced they would be hiking up interest rates for the 14th time to 5.25%.
Moneyfacts, the financial data provider, claimed yesterday, once the announcement was declared by Halifax, that the average rate on a new-fixed deal lasting for two years was now 6.83%, down from 6.84% on Tuesday. Following this, the typical rate on a new five-year fix nudged down to 6.34% from 6.35%.
‘More lenders are likely to follow this trend,’ said Chris Sykes, technical director at the broker Private Finance. ‘[A]nd we may even see further rate reductions from those lenders who have already lowered rates.’
Halifax have stated that rates would be axed ‘across the range’, including deals aimed at homebuyers. HSBC is also cutting some of its fixed rates – it is understood by up to 0.35%.
HSBC followed Nationwide, which slashed rates on fixed mortgages by up to 0.55 percentage points with effect from Wednesday.
David Hollingworth, an associate director at broker L&C Mortgages, said: ‘This continues the trend of improvement in fixed mortgage rates which has emerged since the positive inflation data last month. That’s now helping to reverse the huge jump in fixed rates, albeit to a small degree.
‘It’s good news and could see others follow as competition begins to heat up, but borrowers shouldn’t hold out for rates to snap back to where they were prior to the recent surge.’
Image: Nick Pampoukidis