The country’s biggest mortgage lender Halifax has cut interest rates, just hours after many of its rivals announced price rises.
The mortgages giant, owned by Lloyds Banking Group, said it would cut rates for a range of its products, including mortgages for first-time buyers, remortgages, large loans and new build deals.
It has not yet published the new prices, meaning the size of the cuts are still unknown.
It comes on the back of a wave of price increases from other lenders, including HSBC, NatWest and Santander.
Gary Boakes, director at Verve Financial, said: Opportunity knocks, with Halifax clearly seeing the current climate as a great opportunity to increase their market share. With other lenders increasing rates today and this week, this is great response and fantastic publicity.
“Even if the rates are just 0.1% lower, the extra business and positive news will be worth the potential cut in their margins. A tactical moved timed perfectly. Well done Halifax.
Craig Fish, director of Beckton-based Lodestone Mortgages & Protection, said: “This move from Halifax stands out like a sore thumb, and shouts out loud that they need some business. They haven’t been priced very well of late, and its those lenders that have hiked their rates that have been reaping the rewards of their pricing strategy and winning all the business. Now its all eyes on Halifax and exactly what rates they will have on offer. We just hope that these rates have some life in them and wont be withdrawn in a matter of days.”
Aaron Strutt of Trinity Financial said: “This is all getting a bit silly now.”
Mortgage prices have largely fallen this year, as markets think about when the Bank of England might start cutting its own base rates. However, the downward path has been far from smooth, with rates correcting as evidence emerges that traders may have got over-exuberant about the possibility of future rate cuts.
This week, the Bank’s Governor Andrew Bailey said that inflation would not necessarily have to be 2% before the Bank starts cutting interest rates.
According to Moneyfacts, the average two-year fixed residential mortgage rate today is 5.72%, firmly off the lows of about 5.5%. reached in late January. The average five-year fixed residential mortgage rate today is 5.30%.
Today, Halifax’s parent company Lloyds Banking Group reported huge profits, but also took a £450 million write-down because of the FCA car loan investigation.
