Halifax has joined the ranks of top lenders slashing mortgage rates below 4 percent, a move anticipated to boost property sales. This week saw Barclays, HSBC, NatWest, and Nationwide also trim their leading home loan interest rates below the 4 percent mark.
These offers are currently tailored for buyers with substantial deposits and often come with hefty application fees. Yet, there’s optimism that these benefits will extend to the broader mortgage market shortly.
Halifax’s latest offerings include a five-year fixed-rate mortgage at 3.99 percent for a 60 percent loan-to-value (LTV) ratio, carrying a £999 fee. Additionally, it’s presenting a two-year fixed-rate deal at 4.36 percent with a £999 fee for up to 60 percent LTV.
The Bank of England recently reduced the base rate to 5 percent, marking the first decrease since the pandemic began in March 2020. Concurrently, swap rates, which influence lending costs between financial institutions, have been on the decline.
Halifax has described the recent cuts in mortgage rates as “encouraging” for various buyers, including first-time purchasers, those climbing the property ladder, or individuals looking to refinance.
However, Halifax cautioned that despite the positive trend in mortgage rates, challenges such as affordability and a shortage of available properties remain significant hurdles for buyers.
Amanda Bryden, Halifax’s head of mortgages, commented: “Against the backdrop of lower mortgage rates and potential further base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.”
Michelle Lawson, Director at Lawson Financial, said: “Halifax are joining the low rate party… Expect more lenders to come on board as swap rates are finally coming down. We are on the cusp of a market change so buyers should be looking at acting sooner rather than later.”
Darryl Dhoffer, Mortgage Broker at The Mortgage Expert, pointed out that the new rates from Halifax are not as low as its rivals. However, he added: “History tells us that the Halifax stay the distance when other lenders may withdraw rates at the toss of a coin.”
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