- Halifax cuts rates on various deals by up to 0.19 percentage points
- Santander reduced selected corrections by up to 0.16 percentage points
Two more major banks have announced they will cut mortgage rates amid the latest drop in mortgage prices.
Halifax today cut interest rates on a number of mortgages by 0.19 percentage points.
And from tomorrow, Santander will do the same, with a series of interest rate cuts of up to 0.16 percentage points on all fixed interest rates, specifically aimed at home buyers.
Rate war: Halifax and Santander both announced rate cuts this week, with more lenders expected to follow suit
The latest repricing follows NatWest yesterday cutting rates on some of its fixed rate products, the second round of rate cuts in just over a week.
Last week, Barclays and HSBC made similar moves, both announcing mortgage rate cuts.
Halifax is now offering the lowest two-year interest rate on the market to buyers with a minimum 40 percent down payment.
The 4.63 per cent two-year fix comes with a fee of £1,099. On a £200,000 mortgage repaid over 20 years, that would cost someone £1,279 a month.
The average two-year fix is currently 5.94 per cent, according to Moneyfacts. Someone in the same situation would pay £1,426 a month on the average deal.
Halifax is also very competitive on five-year fixed rate terms for those looking to purchase or refinance a mortgage with the largest down payment or equity.
The lowest mortgage rate is 4.4 per cent with a fee of £999, while the best rate for homebuyers who fix their mortgage for five years is 4.26 per cent. Both rates are the second lowest on the market.
Nicholas Mendes, technical manager at broker John Charcol, said: ‘Halifax has further reduced rates across its product range, aimed at homebuyers and first-time buyers in response to competitive market conditions.
‘Recently, many lenders have been re-pricing their listings in the run-up to the election, looking to take advantage of the brief respite that is occurring as buyer activity picks up again.
‘Buyers have returned to the market after a brief lull, with little expectation from the Labour government-in-waiting on significant stimulus.’
While borrowers have to wait and see what Santnader has to offer tomorrow, there is nothing to do for people who want to refinance their mortgage.
Brokers hope this will fuel competition among lenders as interest rates fall.
Stephen Perkins, director at Yellow Brick Mortgages, told news agency Newspage: ‘This move by Santander could intensify the rate battle between the UK’s biggest lenders.
‘More cuts are now likely ahead of the expected base rate cut in August. Things are really getting heated on the mortgage market now.’
Justin Moy, managing director at EHF Mortgages, added: “This is another small but significant rate cut from Santander, keeping them within the range of Barclays and NatWest, who have already cut their rates this week.
“While buyers won’t see a huge improvement in their monthly payments, all of these small wins add up over time. The momentum of the mortgage rate cut is building.”