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Nationwide and Halifax LOWER mortgage rates: is this the start of a ‘price war’ and will borrower costs continue to fall?
- Nationally, mortgage interest rates have been reduced by a maximum of 0.20%
- Halifax’s discounts apply to mortgages purchased through brokers
- The average interest rate on fixed mortgages has fallen further since November
Major mortgage lenders Nationwide and Halifax have lowered their rates as the average cost of a fixed-rate mortgage continues to decline from last year’s highs.
Nationwide has slashed interest rates on its mortgage offerings by up to 0.2 percent, with the cheapest fixed deal now standing at 4.34 percent.
The price reductions include low-income mortgages aimed at first-time buyers, as well as refinancing products.
Ups and downs: Mortgage rates have risen gradually since the Bank of England started raising base rates. They then peaked after the mini-Budget, but are now slowly declining
A five-year fixed rate on a 10 per cent deposit mortgage is now 4.79 per cent, with a fee of £999 – a discount of 0.1 per cent.
There is also a five-year fixed rate on a 40 percent deposit mortgage of 4.34 percent less 0.09 percent. It also comes with a £999 fee.
Tracker rates are also down by up to 0.2 percent, with initial terms of two, three and five years. A two-year tracker rate on a 40 per cent deposit is now 3.79 per cent with a fee of £999 less 0.20 per cent.
This will hopefully spark another price war in the mortgage market, and it’s about time
Lewis Shaw, Riverside Mortgages
Henry Jordan, director of mortgages at Nationwide Building Society, said: ‘These latest rate cuts show borrowers that we want to continue to offer some of the most competitive mortgage products on the market as we try to support as many people as possible, whether they’re buying a new home or renovate their existing home.’
The mortgage bank has also implemented a number of rate reductions on its additional loan mortgages, including our green additional loan products for those who want to improve the energy efficiency of their home.
Lewis Shaw, mortgage, protection and equity release advisor at broker Riverside Mortgages said: “With the top two mortgage lenders cutting interest rates next week, hopefully this will spark another price war in the mortgage market, and it’s about time.”
Will the mortgage interest fall below 4%?
Mortgage rates rose rapidly at the end of last year, thanks to the uncertain economic conditions in the UK and the consequences of the disastrous mini-budget in September, but are now falling slowly.
The interest rate on the average five-year mortgage has fallen well below 6 percent to 5.42 percent as more lenders lower their rates.
Two-year fixed-rate deals now average 5.6 percent, according to Moneyfacts.
But the best deals available right now are heading towards 4 percent, with rates as low as 4.04 percent on a 10-year fix for those with large deposits.
Halifax has also announced tariff reductions for its brokerage product range. These are rates only available to those who go through a broker, rather than directly to the lender.
The bank hasn’t said exactly how much its rates have been cut, but the reductions have been applied to fixed rates for homebuyers, including first-time buyers and affordable housing programs, including shared ownership, as well as its range of green home products.
The bank has also introduced new three-year fixed rate products for homeowners who need to take out a new mortgage. The rates are available from Monday 23 January.
Shaw added: “We’ve seen fixed rates come down in recent weeks which has boosted activity so further cuts would be the medicine the property market needs to shake off the January blues and make 2023 a flying start.’