Online bank First Direct has become the latest lender to join a mounting mortgage price war, announcing rate cuts across its entire range of repayment mortgages from January 5. The most significant reduction is on a 10-year fixed rate mortgage, slashed by 0.98 percentage points to 3.99%, applicable to borrowers needing no more than 60% of the property's value.
First Direct's five-year fixed rate standard mortgage, with the same 60% loan-to-value, also falls to 3.99%. Rates on two and three-year fixed deals are being cut as well, along with offers for those with smaller deposits. The bank is part of HSBC, which earlier cut rates on some mortgages to under 4%.
Liam O’Hara, head of mortgages at First Direct, said: “We are committed to reducing the cost of borrowing where we can for our customers, and we’re very pleased to be starting the year with the introduction of new sub-4% mortgages.” He highlighted flexible features including unlimited overpayments, 40-year maximum terms, and product booking fees capped at £490.
TSB has also announced revised rates on a range of mortgage products by up to 0.55 percentage points, effective from tomorrow. Its two-year fixed rate for first-time buyers and home movers now starts at 4.54% with a £995 fee for those borrowing up to 60% loan-to-value, while remortgage rates begin at 4.44%.
Halifax earlier this week became the first major lender to cut rates on its remortgage deals by up to 0.83 percentage points, and also reduced rates for existing borrowers refinancing by up to 0.92 percentage points. These are the lowest mortgage rates since June last year, following lower-than-expected inflation, with CPI falling to 3.9% in November.
