Halifax has become the latest high street lender to cut interest rates as mortgage lenders anticipate a drop in the Bank of England base rate next week.
The UK’s largest lender has joined its rivals Barclays, NatWest, Nationwide and Santander, which have all cut rates this month. Some advisers have said a mortgage rate war is now well underway.
From tomorrow, Halifax’s homemover and first-time buyer mortgages will see reductions of up to 0.17% on 2-year fixed rates and reductions of up to 0.13% on 3-year fixed rates.
On the remortgage front, 2-year fixed rates with a £1,999 product fee will see reductions of up to 0.11%.
However, the lender is increasing selected 2-year fixed remortgage rates with £0 or £999 product fees by up to 0.12% and selected 5-year fixed remortgage rates by up to 0.15%.
Equally, across its Product Transfer and Further Advance range, Halifax says there will be increases of up to 0.12% on 2-year fixed rates and increases of up to 0.15% on 5-year fixed rates.
Rohit Kohli, Director at Romsey-based The Mortgage Stop said it looks like a full scale battle of the banks is raging as lenders vie for business from new borrowers.
However, he said current borrowers appear to be paying the price: “Existing borrowers seem to be the walking wounded in this salvo of changes. However, there’s plenty of deals out there for people to set their sights on.”
Dariusz Karpowicz, Director at Doncaster-based Albion Financial Advice, agreed: “Halifax, the UK’s biggest residential lender, is slashing rates for homebuyers and first-time buyers with cuts up to 0.17% on 2-year fixes. Christmas has come early if you are looking to buy.
“While new borrowers get the goodies, existing customers on product transfers face increases of up to 0.15%.
“If you are remortgaging, speed matters. Lenders will likely slow down for the festive break, so lock in your deal now before the window closes.”
Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, said the increases and reductions shows lenders are still balancing funding pressures carefully but, overall, reflect a growing confidence among lenders as we approach the New Year.
“Halifax’s focus on supporting first-time buyers and homemovers is particularly welcome, as this segment has faced affordability challenges throughout 2025.
“A cut of up to 0.17% may not sound huge, but it could be the difference between affordability and inaccessibility for some borrowers.
“Overall, Halifax’s move adds further momentum to a market that’s showing real signs of recovery heading into 2026, a positive sign for both buyers and homeowners looking for stability and opportunity in the months ahead.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said the lender’s announcement was a mixed bag.
He added: “It’s ideal for those looking to move home but some remortgage and retention deals are edging upwards. This is more likely to manage current workflows than a reflection of market conditions, but the cost of 2-year money is comfortably cheaper than 5-year options.
“We may see more of the cheaper deals for homemovers as lenders look to target that borrower demographic, with more than one eye on 2026’s potential hot spot in the market.”
Aaron Strutt, Product and Communications Director at London-based Trinity Financial, said such fierce competition to attract customers between lenders has, for the most part, helped lead to better rates and increased product choice.
He said: “If you are on the hunt for a mortgage, the combination of cheaper fixes and better mortgage affordability is making this a good time to get on the property ladder or remortgage, especially if you have struggled to get a sufficiently large loan in the past.
“There has rarely been a better time to get a mortgage over the last few years and this ties in with the easing of the qualification criteria and the expected reductions to the Bank of England base rate.”
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said: “Halifax are the latest lender to improve their mortgage range for first-time buyers and homemovers. Lenders are trying to make reductions where possible to try and obtain any last minute business before the end of the year.”
