HALIFAX have today announced some rate increases on selected mortgage products, going against the grain of recent rate cuts by major lenders.
But brokers have told borrowers they “shouldn’t be fazed” and that the this is the “banking equivalent of a bartender screaming “we’re out of beer”.
Halifax announced that, from Wednesday, it will be increasing selected 2-year fixed 60% and 75% loan to value (LTV) remortgage products up to 0.10%.
It also made rate increases of up to 0.05% on selected 2-year fixed 60% LTV product transfer and further advance products.
Brokers, however, brushed the rate rises aside and urged borrowers not to read too much into them.
Top Dog
Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer, said: “Halifax is hiking selected mortgage rates despite falling swap rates, but borrowers shouldn’t be fazed.
“They’re doing this because they have been ‘Top Dog’ on rates for about a week, got absolutely flooded with applications and are now managing work flow.
“This is a classic ‘watering down’ strategy. The cost of money is down, but their underwriting team is drowning in paperwork. Instead of processing faster, they’re just making the product too expensive to buy so you’ll leave them alone.
“It’s the banking equivalent of a bartender screaming “We’re out of beer!” just because they can’t pour pints fast enough.”
Rohit Kohli, Director at Romsey-based The Mortgage Stop, agreed: “Halifax has been very competitive recently, so this looks more like them easing off the accelerator than reacting to funding pressure.
“Swap rates have actually been trending down sharply in recent data, so this repricing isn’t being driven by rising costs. If anything, the backdrop supports more reductions on the horizon.
“That’s why this feels like book management. I wouldn’t read it as a market warning. It’s more about managing pipeline and margins than signalling a wider shift.”
Volume dial
Louis Mason, Communications Director at London-based Oportfolio Mortgages, said “Halifax repricing at 60% and 75% LTV isn’t a market signal, it’s a volume dial being turned down”.
He continued: “These are the tiers where lenders attract their safest, most rate-aware borrowers, typically equity-rich remortgagors who’ve done their homework.
“When a major lender raises here, it usually means one of two things. Either they’ve hit an internal capacity threshold and need to slow things down, or they’re quietly rebuilding margin in a segment where they feel borrowers can absorb it without walking away.
“What’s interesting with Halifax specifically is that they’ve been sitting at or near the top of the market for first-time buyers for a while now.
“This move at the lower LTV tiers looks very much like a deliberate realignment of their book, pulling back from equity-rich remortgagors to maintain their appetite and competitiveness where they’ve chosen to focus.”
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, added: “This has all the feel of Halifax looking to scale back its lending for certain borrower types, as lenders are generally focusing more on purchase and first-time buyer deals at the moment.
“Increasing rates a little on remortgages should allow Halifax to keep those purchase deals competitive.”
Also sharing that view is Jonathan Alvarez Herrera, Mortgage Consultant at Ringwood-based Ayla Mortgages.
He said: “Halifax’s decision to increase rates at 60% and 75% LTV looks more like strategic repricing than a sign of broader market tightening.
“Overall, the trend remains competitive, particularly for higher LTV borrowers and first-time buyers.”
