This is the second time that the lender has lowered rates on mortgage deals this month
Halifax, the UK’s biggest mortgage lender, has announced new rate reductions on selected five-year fixed rates, effective from Monday, August 21.
Rates will be lowered across the lender’s homebuyer range, which include first time buyer, new build, large loans, and affordable housing – shared equity and shared ownership – and their equivalent green home products.
As part of the latest rate cuts, the lender’s 85% loan-to-value (LTV) fee-free five-year fixed rate will be slashed by 12 basis points (bps) to 5.48%, while the 80% LTV option will be reduced by 11bps to 5.48%.
Last week, Halifax also reduced rates on selected fixed mortgage products, following moves by other big lenders such as HSBC, TSB, and Nationwide.
“As a large national lender, Halifax has the margins and reach to lower rates while retaining a profitable mortgage book,” commented Clive Read, owner at mortgage and insurance broker Goldmanread.
“Aside from that, as part of the largest banking group in the UK, they need to demonstrate that they are supporting UK homeowners and consumers. Their move is likely to be followed by the other large lenders in this space, though we may not see much movement from the smaller players.”
Lewis Shaw, owner at Mansfield-based Shaw Financial Services, agreed, saying that where Halifax went, others tended to follow, as they were the biggest mortgage lender – being part of the Lloyds Banking Group.
“More reductions are welcome, but let’s not get complacent,” Shaw warned. “This could still be the calm before the storm.”
For Peter Stamford, director and lead adviser at Moor Mortgages, Halifax was making assertive moves to bolster its mortgage portfolio as a likely response to the subdued business volumes in recent months.
“With markets anticipating further base rate hikes due to persistent core inflation, the UK's leading mortgage lender’s rate reductions may be short-lived,” Stamford said.
“As the industry sees a slowdown in new applications, other lenders might soon follow Halifax’s lead. Borrowers should seize these opportunities, but with caution, as the financial climate remains unpredictable.”
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