Halifax is reducing rates on selected mortgage products by up to 0.15% from Friday, August 14, a move brokers have welcomed as "very encouraging" and expect other lenders to follow.
Rate reductions across product range
The lender is cutting rates on its homemover and first-time buyer products by up to 0.15%, while remortgage products are being reduced by up to 0.13% on selected fixed-rate deals. Product transfer and further advance products are seeing reductions of up to 0.12%.
This follows a rise of up to 0.12% by Halifax just last week. The reductions offer some relief to borrowers after a volatile period for mortgage pricing, with lenders repeatedly repricing deals in recent weeks.
Brokers see significance in Halifax's move
Although the cuts are relatively modest, brokers said the significance lies in one of Britain's biggest mortgage lenders deciding it had room to cut. Halifax's decision could increase competitive pressure across the market, potentially prompting rival banks and building societies to respond with reductions of their own, brokers said.
For first-time buyers and homemovers struggling with affordability, as well as homeowners nearing the end of existing fixed deals, even small improvements in pricing could make a difference to monthly repayments and confidence, brokers added.
Industry reaction
Jamie Elvin, director at London-based Strive Mortgages, said Halifax had "fired the first shot" in the mortgage price war. He added: "A 0.15% cut might not look dramatic on paper, but when a lender the size of Halifax moves, the rest of the market takes notice. After months of rates moving up, down and sideways, this is a welcome signal that lenders are prepared to compete harder for borrowers."
Jamie Alexander, mortgage director at Romsey-based Alexander Southwell Mortgages, said he expects more lenders to now cut. He added: "Nobody is going to celebrate 0.15%, but that is not really the point. Halifax is one of the biggest lenders in the country and when they move, others tend to follow. That is where the real significance lies."
Louis Mason, content and communications director at London-based Oportfolio Mortgages, welcomed the cuts. He said: "Mortgage rates have spent much of this year doing a frustrating two-step. One step forward, one step back. So Halifax moving in the right direction is certainly welcome."
Ben Perks, managing director of Stourbridge-based Orchard Financial Advisers, said the cuts were small but encouraging. He added: "A tiny step in the right direction. While nobody is punching the air about 0.15%, it does show a growing trend of reductions amongst lenders and this is very encouraging."
Darryl Dhoffer, founder of Bedford-based The Mortgage Geezer, said borrowers needed to act quickly. He added: "This is a classic volume-driven play. Halifax had fallen behind more aggressive market rivals, so these modest cuts aim to pull them straight back into the conversation for summer movers."
Justin Moy, managing director of Chelmsford-based EHF Mortgages, said the market might be finally getting some momentum back. He added: "Some positive news for borrowers: not the largest cut, but an indication that some momentum is returning to the mortgage market."
Nouran Moustafa, practice principal and IFA at Roxton Wealth, said it was a "positive signal". She added: "A 0.15% cut might not look dramatic on paper, but this is exactly the kind of movement the mortgage market needs right now. Borrowers have spent months watching rates move up, down and sideways, so cuts from a major lender like Halifax help rebuild confidence."
If more lenders follow, August could become a much better month for borrowers than many expected, Moustafa said.
