- Halifax cuts interest rates on several transactions by up to 0.19 percentage points
- Santander to cut selected interest rates by up to 0.16 percentage points
Two more major banks have announced cuts to mortgage rates, in the latest downward move in home loan prices.
Today, Halifax cut interest rates on a range of mortgage deals by 0.19 percentage points.
And as of tomorrow, Santander will follow suit, with a series of rate cuts on its fixed-rate operations of up to 0.16 percentage points, aimed at home buyers.
Rate war: Halifax and Santander have announced rate cuts this week and more lenders are expected to follow suit
The latest price change follows NatWest cutting interest rates on several of its fixed-rate products, which yesterday saw it make its second round of rate cuts in just over a week.
Last week, Barclays and HSBC took similar steps and announced cuts in mortgage rates.
Halifax is now offering the lowest two-year fixed mortgage on the market to those buying with a deposit of at least 40 per cent.
Its two-year fixed rate of 4.63 per cent costs £1,099. On a £200,000 mortgage repaid over 20 years, that would cost £1,279 a month.
According to Moneyfacts, the average two-year repair rate is currently 5.94 per cent. Someone in the same situation would pay £1,426 a month for the average contract.
Halifax is also in a very competitive position to source five-year fixed loans for those purchasing or refinancing their mortgages with the largest deposits or equity.
Its lowest refinance deal is 4.4 per cent with a £999 fee, while its best rate for home buyers locking in a five-year mortgage is 4.26 per cent – both the second lowest on the market.
Nicholas Mendes, technical manager at broker John Charcol, said: ‘Halifax has made further rate reductions across its product range, targeting home-movers and first-time buyers, in response to market competition.
‘Many lenders have recently been tweaking their offer prices in the run-up to the election, aiming to take advantage of the brief respite as buyer activity picks up again.
‘With little expectation of significant incentives from the incoming Labour government, buyers have reconnected with the market after a brief pause.’
While borrowers will have to wait and see what Santander has to offer tomorrow, there is nothing for those refinancing their mortgages.
Brokers hope this will help increase competition between lenders in the future, sending rates lower.
Stephen Perkins, managing director of Yellow Brick Mortgages, told the Newspage news agency: ‘This move by Santander has the potential to escalate the rates battle between the UK’s largest lenders.
“Further cuts are likely before the expected reduction in the base rate in August. Things are really booming in the mortgage market.”
Justin Moy, managing director of EHF Mortgages, added: ‘This is another small but important rate cut from Santander, which keeps them within reach of Barclays and NatWest, who have already improved rates this week.
“While buyers won’t see a huge improvement in their monthly payments, all of these small benefits add up over time. Momentum for lowering mortgage rates is growing.”
