Halifax Joins Other Lenders in Cutting Mortgage Rates
Halifax has announced a reduction in mortgage rates, following in the footsteps of HSBC, Nationwide, and TSB. This move comes despite the Bank of England’s recent decision to increase interest rates for the 14th consecutive time.
Halifax’s new deals, set to be introduced on Friday, include a five-year fixed rate of 5.28%, representing a drop of 0.71 percentage points. Two-year fixed-rate loans will also see a decrease of up to 0.27 percentage points.
The decision to lower rates comes amidst a slowdown in the housing market, with experts warning that high mortgage costs are impacting demand. Nationwide reported the largest drop in annual house prices in 14 years on its index last week, with property values declining by 3.8% in July. Halifax’s separate figures also reported a 2.4% year-on-year fall in July.
Imogen Pattison, an assistant economist at Capital Economics, predicts that price drops will continue in the coming months and may even accelerate next year.
Despite the Bank of England’s interest rate hike, lenders like Halifax are taking steps to make mortgages more affordable for potential buyers. This move is aimed at stimulating demand in the housing market, which has been experiencing a slowdown in recent months.
Halifax’s decision to cut rates is in line with other major lenders, including HSBC, Nationwide, and TSB. These lenders have also reduced rates on certain products, despite the Bank of England’s decision to increase interest rates.
The reduction in mortgage rates by Halifax and other lenders is a response to the current state of the housing market. With affordability becoming a concern for many potential buyers, these rate cuts aim to make mortgages more accessible and attractive.
Experts predict that the decline in house prices will continue in the coming months, with the possibility of further acceleration next year. This, coupled with the rate cuts by lenders, may help to stimulate demand and revive the housing market.
Overall, Halifax’s decision to lower mortgage rates is a strategic move to attract buyers in a sluggish housing market. By offering more affordable rates, Halifax aims to boost demand and support the recovery of the housing sector.