HALIFAX is cutting its home-mover and first-time buyer fixed rate mortgages by up to 0.35% on Friday in a move that “feels like the start of a broader repricing” in the market, brokers have claimed. This follows lenders such as HSBC, Santander and TSB also cutting rates this week.
Craig Fish, Director at London-based Lodestone Mortgages, said: “Halifax joining HSBC and Santander in cutting rates is genuinely positive news, and yes, this does feel like the start of a broader repricing as lenders compete for business in a quieter market.
“But let’s keep things in perspective. Rates are still over 1% higher than before the Middle East conflict began, so whilst the direction of travel is welcome, we are a long way from where we were.
“Lenders are cutting because swap rates have ticked down slightly, giving them a little room to move. But swaps remain elevated, and with the US still using threatening language tensions could escalate quickly, and rates with them.
“My advice to borrowers? Don’t wait for rates to fall back to where you think they should be. That may not happen anytime soon.
“If you’re a first-time buyer or homemover, this window of competition between lenders is your opportunity. Speak to a broker, understand your options and act while the market is working in your favour.”
A big ask
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, cautiously welcomed the cuts but reminded borrowers that we live in the age of Trump.
He said: “Conditions have improved and Halifax is one of a number of lenders who have pared back on some of their recent hikes. If Trump doesn’t start any more wars we should be able to take a breather. That’s a big ask.”
Elliott Culley, Director at Hayling Island-based Switch Mortgage Finance, said: “Halifax are reducing their rates in line with other mortgage lenders. With tensions in the Middle East still elevated, it raises questions as to why lenders are now willing to reduce rates.
“In reality the swap rates have been fairly consistent over the last two weeks and mortgage lenders priced in much higher swap rates. As this has not materialised, some lenders are now reducing rates to make their products more competitive to borrowers.”
Volatile situation
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said it’s too early to call this a definitive shift.
She continued: “It’s encouraging to see a handful of big lenders reprice down over the past day or two but let’s remember that the situation in the Middle East remains highly volatile. These cuts could be reversed just as quickly.”
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, agreed that the announcement from Halifax is a step in the right direction but believes what matters is whether the cuts are market-wide and sustained.
She said: “Rates are still far higher than they were at the end of February, but they are at least now moving in the right direction. The big question now is whether this is a premature move or the beginning of a more sustainable downward repricing.”
