Halifax has joined other leading lenders in cutting mortgage rates to under 4 percent in a move that is expected to drive up sales.
Earlier this week, Barclays, HSBC, NatWest and Nationwide shaved interest rates on their market-leading home loans to take them under 4 percent.
Currently, these deals are only available to buyers with large deposits and many come with big application fees. However, there are hopes they will feed through to the wider mortgage market in the coming days.
The new deals from Halifax include a five-year fix on a 60 percent loan to value (LTV) at 3.99 percent with a fee of £999.
It is also offering a two-year fix at 4.36 percent with a £999 fee up to 60 percent LTV.
Last week the Bank of England lowered the base rate to 5 percent, which was the first cut since the start of the pandemic in March 2020. At the same time, so-called swap rates, which set the figure for how much financial institutions led to each other have been falling.
Halifax said recent mortgage rate drops were “encouraging” for first-time buyers, those moving along the housing ladder or those refinancing.
But it warned affordability challenges and lack of available properties still posed problems for buyers.
Its head of mortgages, Amanda Bryden, said: “Against the backdrop of lower mortgage rates and potential further base rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year.”
Commenting on the recent lender price war the managing director of mortgage broker Coreco, Andrew Montlake, told Newspage: “Lenders large and small are starting to shave rates every day now.
“All of these cuts are really starting to drive demand and the prospects for the second half of the year look very promising.”
Michelle Lawson, Director at Lawson Financial, said: “Halifax are joining the low rate party … Expect more lenders to come onboard as swap rates are finally coming down.
“We are on the cusp of a market change so buyers should be looking at acting sooner rather than later.”
Darryl Dhoffer, Mortgage Broker at The Mortgage Expert, said the new rates from Halifax are not as low as rivals.
But, he said: “History tells us that the Halifax stay the distance when other lenders may withdraw rates at the toss of a coin.”