Halifax cuts kick in on Friday (Image: ASphotowed via Getty Images)
Halifax is slashing its home-mover and first-time buyer fixed rate mortgages by as much as 0.35% on Friday, in a move that “feels like the start of a broader repricing” in the market, according to brokers. This follows similar rate reductions from lenders including HSBC, Santander and TSB earlier this week.
Craig Fish, director at London-based Lodestone Mortgages, said: “Halifax joining HSBC and Santander in cutting rates is genuinely positive news and, yes, this does feel like the start of a broader repricing as lenders compete for business in a quieter market. But let’s keep things in perspective. Rates are still over 1% higher than before the Middle East conflict began, so while the direction of travel is welcome, we are a long way from where we were.
“Lenders are cutting because swap rates have ticked down slightly, giving them a little room to move. But swaps remain elevated, and with the US still using threatening language tensions could escalate quickly, and rates with them.
“My advice to borrowers? Don’t wait for rates to fall back to where you think they should be. That may not happen anytime soon.
“If you’re a first-time buyer or homemover, this window of competition between lenders is your opportunity. Speak to a broker, understand your options and act while the market is working in your favour.”
Santander has also made changes (Image: Ceri Breeze via Getty Images)
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Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, offered a guarded welcome to the reductions, while cautioning borrowers to bear in mind the unpredictable era of Trump.
He said: “Conditions have improved and Halifax is one of a number of lenders who have pared back on some of their recent hikes. If Trump doesn’t start any more wars, we should be able to take a breather. That’s a big ask.”
Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, said: “Halifax are reducing their rates in line with other mortgage lenders. With tensions in the Middle East still elevated, it raises questions as to why lenders are now willing to reduce rates.
HSBC has also cut rates (Image: whitemay via Getty Images)
“In reality the swap rates have been fairly consistent over the last two weeks and mortgage lenders priced in much higher swap rates. As this has not materialised, some lenders are now reducing rates to make their products more competitive to borrowers.”
Emma Jones, managing director at Runcorn-based Whenthebanksaysno.co.uk, cautioned that it remains premature to declare this a decisive turning point.
She continued: “It’s encouraging to see a handful of big lenders reprice down over the past day or two, but let’s remember that the situation in the Middle East remains highly volatile. These cuts could be reversed just as quickly.”
Katy Eatenton, mortgage and protection specialist at St Albans-based Lifetime Wealth Management, concurred that Halifax’s announcement represents a move in the right direction, yet maintains that the crucial factor is whether the reductions prove to be widespread and sustained across the market.
She said: “Rates are still far higher than they were at the end of February, but they are at least now moving in the right direction. The big question now is whether this is a premature move or the beginning of a more sustainable downward repricing.”