Brokers predict a price war is coming
Halifax, the UK’s biggest mortgage lender, has announced a rate reduction on selected fixed mortgage products.
From tomorrow, August 11, products such as the lender’s 6.10% five-year fixed rate option will see cuts of up to 71 basis points, reducing its rate to 5.39%.
The move aligns Halifax with other big lenders like HSBC, TSB, and Nationwide, which have already decreased some of their rates.
Mortgages: Halifax joins rivals in cutting rates on mortgages https://t.co/i53weGbS7x
— BBC News (UK) (@BBCNews) August 10, 2023
Despite the fact that the Bank of England raised its base rate to 5.25% last week, lenders have been reducing fixed rates, surprising many brokers.
“With the Halifax, the UK’s largest residential lender, adjusting its prices downwards alongside HSBC and TSB, it signals to the market that even following a base rate increase, fixed rates can drop,” Riz Malik, director at mortgage broker R3 Mortgages, said. “In that regard, the mortgage market has become almost surreal. August might emerge as the most favourable month for mortgage rates this year.”
“After the rate reductions by HSBC and TSB, Halifax now wants in on the action, which can only be positive,” Lewis Shaw, founder of Shaw Financial Services, commented. “It’s a welcome relief to see rate reductions, and this could be the start of a price war as transaction volumes drop and mortgage lenders need to get the sharp elbows out to hit their targets.”
Rob Gill, managing director at mortgage broker Altura Mortgage Finance, agreed with Shaw, saying that a rate war could indeed be on the cards.
“All eyes will now be on next week’s inflation figure,” he said. “If this confirms a further fall in inflation, a mortgage price war in September cannot be ruled out as lenders seek to make up for a quiet July and August.”
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