Halifax latest major lender to announce rate cuts

Halifax has just declared updates to its product offerings that will go live from Friday, 11 August. Notably, the most significant cuts are seen in Halifax’s 5-year fixed rate options.

This move aligns the Halifax with other lenders like HSBC and TSB, which have already decreased selected rates after the latest hike in the base rate to 5.25% last week.

Brokers noted that the mortgage market has become almost surreal, as despite the fact that the base rate has just been raised to 5.25%, fixed rates are falling.

Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages, said: “With the Halifax, the UK’s largest residential lender, adjusting its prices downwards alongside HSBC and TSB, it signals to the market that even following a base rate increase, fixed rates can drop. In that regard, the mortgage market has become almost surreal.” He added: “August might emerge as the most favourable month for mortgage rates this year.”

Another broker, Rob Gill, managing director at mortgage broker Altura Mortgage Finance, suggested a rate war could be on the cards next month: “All eyes will now be on next week’s inflation figure, due on August 16th. If this confirms a further fall in inflation, a mortgage price war in September cannot be ruled out as lenders seek to make up for a quiet July and August.”

Lewis Shaw, founder of Mansfield-based Shaw Financial Services, delivered much the same verdict: “After the rate reductions by HSBC and TSB, Halifax now wants in on the action, which can only be positive. It’s a welcome relief to see rate reductions, and this could be the start of a price war as transaction volumes drop and mortgage lenders need to get the sharp elbows out to hit their targets.”

Ian Middlemass, Head of Operations at Chester-le-Street-based PIA Financial Solutions, concluded: “It’s interesting to see Halifax making these updates to their product offerings, particularly the noticeable cuts in their 5-year fixed rate options. This move certainly reflects the shifting dynamics in the mortgage market.”