Borrowers will 'become walking wounded' despite largest lender's latest mortgage rate cut

Halifax has become the latest high street lender to cut interest rates as mortgage lenders anticipate a drop in the Bank of England base rate later this month.

The UK's largest lender has joined its rivals Barclays, NatWest and Santander, which have all cut rates in the last few weeks.

Homemover, first time buyer and remortgage borrowers will see rates fall by up to 0.17% on 2 year-fixes and up to 0.13% on 3 year-fixed deals.

But there is a sting in the tail for exisiting customers who chose a 2-year fixed remortgage with £0 or £999 product fee; their rate is set to increase by up to 0.12%.

Borrowers wanting to take out a 5-year fixed remortgage will see their rate increase even more, by 0.15%.

Product transfer and further advance range borrowers will see increases of up to 0.12% on 2 year fixed rates and increases of up to 0.15% on 5 year fixed rates

Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance said Halifax was looking to improve its mortgage range for first time buyers and home movers. "Lenders are trying to make reductions where possible to try and obtain any last minute business before the end of the year."
 

Rohit Kohli, Director at Romsey-based The Mortgage Stop said a like a full scale battle of the banks is raging as lenders vie for business from new borrowers. 

He said current borrowers were paying the price: “Existing borrowers seem to be becoming the walking wounded in this salvo of changes but there's plenty of of deals out there for people to set their sights on.”

In any case, those looking to take out a Halifac deal needed to do so “with urgency Kohil said: ”W don't know at what point the drawbridge will be taken up by the banks as they'll want to slow things down for the Christmas break."

Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice  said Christmas has come early for those looking to buy a home.

He said: "But there's a catch While new borrowers get the goodies, existing customers on product transfers face increases of up to 0.15%. It is a proper battle for new business out there. If you are remortgaging, speed matters. Lenders will likely slow down for the festive break, so lock in your deal now before the window closes."

Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions said the reduction reflected a growing confidence among lenders as we approach the New Year. 

"Halifax’s focus on supporting first-time buyers and home movers is particularly welcome, as this segment has faced affordability challenges throughout 2024. 

“A cut of up to 0.17% may not sound huge, but it could be the difference between affordability and inaccessibility for some borrowers.” Overall, Halifax’s move adds further momentum to a market that’s showing real signs of recovery heading into 2026, a positive sign for both buyers and homeowners looking for stability and opportunity in the months ahead."

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages commented: "A mixed bag from Halifax, depending on what your needs are. Ideal for those looking to move home, some remortgage and retention deals are edging upwards, more likely to manage current workflows than a reflection of market conditions, but the cost of 2-year money is comfortably cheaper than 5-year options. We may see more of the cheaper deals for homemovers as lenders look to target that borrower, with more than one eye on 2026's potential hot spot in the market."


Aaron Strutt, Product and Communications Director at London-based Trinity Financial said such fierce competition to attract customers between the lenders has, for the most part helped lead to better rates and increased product choice. 

He said: "If you are on the hunt for a mortgage the combination of cheaper fixes and better mortgage affordability is making this a good time to get on the property ladder or remortgage especially if you have struggled to get a sufficiently large loan in the past. There has rarely been a better time to get a mortgage over the last few years and this ties in with the easing of the qualification criteria and the expected reductions to the Bank of England base rate."