Halifax, the country’s largest mortgage lender, has slashed the interest rates on a number of its deals, fuelling hopes that home loan costs will continue to come down in 2024.
Halifax cut rates on a number of its products by as much as 0.92%, while other lenders also owned by Lloyds Banking Group, such as Scottish Widows and BM Solutions, cut their own prices too.
Imogen Sporle, head of property at Finanze, said: “As we suspected, the New Year will bring new opportunities and a new impetus for lenders to take a lead in stimulating business.
“Regardless of the economic forecasts, lenders need to move money and the only way to do that is to offer competitive rates. It's good to see this happening so soon and we've already seen borrowers lining up their plans for the year ahead.”
However, some brokers were sceptical of the timing of the cuts. Coming on 2 January, they are too late for the wave of borrowers who went onto new deals at the start of the year.
Imran Hussain, director at Harmony Financial Services, said: “Though this is a positive move, why could they not have done this in December as many borrowers will have now gone onto deals on the 1st of January and could have benefited from savings?”
According to Moneyfacts, the average 2-year fixed residential mortgage rate today is 5.93%, down from an average rate of 5.94% at the end of 2023. The average 5-year fixed residential mortgage rate today is 5.54%, down from 5.56%.
Both figures are down by around three quarters of a percentage point from their peak in July, when markets feared the Bank of England may be forced to raise its base rate to 6%. But good news on inflation in recent months prompted the Bank to hold its rate at 5.25% in September, where it has kept them ever since.
