One of Britain’s biggest lenders has kicked off 2024 with a wave of mortgage rate cuts.
Halifax has slashed its remortgage rates across its two-year, five-year and 10 year fixed rate deals by up to 0.83 percentage points.
It also cut rates for its existing customers that opt to stay loyal and refinance with the bank by up to 0.92 percentage points.
Its cheapest two-year fix for those remortgaing with at least 40 per cent equity in their home is now 4.68 per cent with a £999 fee.
First of the year: Halifax kicked off the New year with its latest wave of mortgage rate cuts
That compares to a market average of 5.93 per cent for two-year fixes, according to Moneyfacts.
Halifax’s cheapest rate is currently a 4.28 per cent five-year fix aimed at home buyers purchasing with at least a 40 per cent deposit.
That’s currently the second best deal on the market, following Generation Home’s 3.94 per cent deal, which launched just before Christmas.
David Hollingworth, associate director at L&C Mortgages, believes this will be the first of many rate cuts to come in 2024.
Mortgage rates have been falling for the past three months with many lenders pricing their mortgages down based on future market expectations for interest rates.
Market interest rate expectations are reflected in swap rates. These swap rates are influenced by long-term market projections for the Bank of England base rate, as well as the wider economy, internal bank targets and competitor pricing.
Sonia swaps are used by lenders to price mortgages. Five-year swaps are currently at 3.4 per cent. Two-year swaps are now at 4.02 per cent.
Only as recently as July, five-year swaps were above 5 per cent. Similarly, the two-year swaps were coming in around 6 per cent.
Hollingworth says: ‘Being the biggest lender it’s always worth noting moves from Halifax and should set the tone for the New Year,
‘I think that the Halifax move is likely to be the first of many as swap rates have dropped again over the festive break, as markets look convinced that interest rates wil be cut.
‘That should feed through in the form of more cuts to fixed rates and is likely to be a quick start as the move form Halifax shows.
We saw five-year rates dip below 4 per cent just before Christmas and with the level of competition in the market, I fully expect lenders to be quick out of the blocks to sharpen their rates.
‘With intense competition and a desire to build volume the market is likely to be very aggressive but a price war should be welcome news to those borrowers coming to the end of their current deal in the coming year.’
This post first appeared on Dailymail.co.uk
