Proactive Investors - Britain’s largest mortgage lender Halifax will reduce rates from Friday following similar moves from rivals in recent weeks.
Cuts of up to 0.71 percentage points will come into effect from tomorrow, taking interest on Lloyds Banking Group PLC (LON:LLOY)-owned Halifax’s five-year fixed deals as low as 5.82% for those seeking 60% loan-to-value mortgages.
Two-year fixes will fall by as much as 0.27 percentage points to 6.18% for prospective buyers willing to pay a 20% deposit.
HSBC (LON:HSBA), Nationwide Building Society (LON:NBS) and TSB Banking Group have also lowered interest rates on mortgage deals this week.
“With the ‘mortgage price war’ ramping up as lenders battle it out to gain customers, the intensification of commercial competition could play into the hands of would-be buyers,” interactive investor analyst Victoria Scholar said.
Having scambled to lift rates in June in anticipation of the Bank of England’s 50 basis point hike to base interest, lenders are now pricing in a less harsh peak in rates, analysts say.
Markets are now anticipating UK interest rates will peak at around 6%, according to AJ Bell analyst Laura Suter, having previously feared rates in excess of 7%.
Warnings have come that potential shocks do remain though, with the UK’s latest inflation figures due next week.
Prices on mortgage deals could therefore swing either way, Suter tipped previously, given banks set these based on anticipations for the Bank of England’s upcoming base rate calls.