Homeowners coming off fixed rate mortgage deals may be set to save thousands this year as lenders vie for business by slashing rates.
Halifax reduced rates on remortgage deals by up to 0.83 percent yesterday on two-year, five-year, and 10-year fixed rates. This could translate to a monthly savings of £145 for those with a £300,000 loan and 25 years left for repayment.
Meanwhile, Leeds Building Society is now offering a two-year fixed rate of 4.6 percent amongst a number of wider cuts to its mortgage range this week.
According to the mutual, a typical customer could save around £300 a month with its improved rates.
HSBC is the latest high street lender to reprice its deals at a lower value this week across its residential, remortgage, and buy-to-let ranges, set to come into effect on January 4.
As of today, the average two-year deal has fallen to 5.92 percent down from 5.93 percent yesterday, while five-year fixes have dropped from 5.54 percent to 5.53 percent, according to Moneyfactscompare.
This comes after three consecutive Bank of England Base Rate freezes at 5.25 percent following a month-on-month fall in the UK’s inflation.
Nicholas Mendes from independent mortgage brokers John Charcol said: “HSBC are the latest high street lender to reprice following similar changes in the market in recent days. HSBC has generally remained consistently among the best buys.
“But following recent changes over the past fortnight, they have slipped slightly lower than we would expect them to be.
“This latest move will no doubt move them amongst the Nationwide, Halifax, Virgin and Barclays rates.”
Mr Mendes added: “As has been noted in the past few days, lenders will be looking to capitalise on the pent-up purchase demand and those coming to the end of their fixed rate in the first half of 2024, so we should expect to see a continuous battle amongst lenders.”
Mortgage broker Ranald Mitchell, of Charwin Private Clients, said the “unprecedented rate war is well underway”, and that “seismic moves” were to be expected in the coming months.
He told the Telegraph: “With net mortgage lending predicted to be lower than last year, lenders will be pulling out all the stops – not just to acquire new business, but also to protect their existing customer base.
“Such vying for business, as well as newbuild initiatives being rolled out and pent-up frustration from an inert purchase market last year, could mean lending forecasts are well off the mark.”
Graham Cox, founder of Self Employed Mortgage Hub in Bristol, said: “Halifax lowering rates by up to 0.92 percent is a reflection that they were far from being the cheapest at the end of last year.
“With the decks cleared, they’re ready to take on new cases and get some early sales in, so have slashed rates.
“Other lenders will follow soon no doubt – competition in this slow market is fierce.”
