"Race for a lender to offer a sub-5% 2-year fixed rate heats up" with Halifax rate cuts

Brokers have welcomed another range of rate cuts from the Halifax, which will go live from tomorrow. Highlights include a 2-year fixed rate purchase mortgage of 5.14% up to 60% loan-to-value with a fee of £999. Purchasers up to the same loan-to-value paying no fee can secure a 2-year fixed rate at 5.40%.

According to Justin Moy, managing director at Chelmsford-based EHF Mortgages: "This looks to be the start of the next wave of rate cutting by lenders, buoyed by the recent hold to the base rate and falling swap rates. Increasing competition will only benefit borrowers, so any saving is really appreciated."

Jamie Lennox, director at Norwich-based Dimora Mortgages, agreed: “Halifax are heading back into the fight for low loan-to-value mortgages as the race for a lender to offer a sub-5% 2-year fixed rate heats up. As 2023 is dwindling, time is against most lenders to make up their market share before the year is up and we'd expect more lenders to make price reductions in the days and weeks to come.”

Elliott Culley, director at Switch Mortgage Finance, also welcomed the cuts: “Great news that Halifax are continuing to drive fixed rates down. They have taken the initiative and it is likely other lenders will follow. Halifax are trying to get as much business as possible in before the end of the year.”

Lee Gathercole, co-founder at Rebus Financial Services, was also upbeat: “Very welcome news, Halifax seems to be leading the way in 2023 I am pleased to see many of the product reductions are focused on first-time buyers, too. Long may it continue and hopefully other big banks can take note."

Ranald Mitchell, director at Norwich-based Charwin Private Clients, said pricing is heading in the right direction: "Mortgage pricing continues to move in the right direction with more rate cuts from Halifax. The competition between lenders is red hot currently, which is setting up 2024 nicely. Two big questions: how far will they go and what level of rates will provide the stimulus the housing market so badly needs?”

But not everyone was impressed. Craig Fish, director at Lodestone Mortgages & Protection, described the cuts as average: “It's good to see lenders reducing rates, but these are very average at best and certainly don't stand out in the rate charts. What we need is a lender to stick their head above the parapet, and offer some market-leading rates to get some competition back into the market. Perhaps they're all planning on starting next year with a bang.”

But Rob Gill, managing director at London-based broker, Altura Mortgage Finance, said the changes were encouraging: “Ongoing rate cuts from mortgage lenders is very much the trend as it appears increasingly likely base rate has peaked and inflation continues to drop. This new series of cuts from the country's biggest lender is another encouraging sign for mortgage borrowers and the housing market.”

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