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Mortgage war heats up as Halifax and TSB announce lower fixed-rate deals

Nick Cheek
Written By:
Nick Cheek
Posted:
Updated:
18/08/2023

Major high street lenders Halifax and TSB have both announced mortgage rate cuts. This follows similar announcements from other banks such as Barclays and NatWest. Is a rate war really breaking out?

Halifax has said it will lower select homebuyer five-year fixed rates, which includes first-time buyer, new build, large loans and affordable housing and green home products. The changes will come into force from Monday 21 August.

Examples of rate changes includes its no-fee five-year fixed rate at 80% loan to value (LTV) decreasing by 0.11% to 5.48% and the lender’s no-fee five-year fixed rate at 85% LTV falling by 0.12% to 5.48%. The loans are available between £25,000 and £1m.

Meanwhile, TSB has lowered select residential three-year fixed rate and five-year fixed rates by up to 0.6% from today. Three-year fixed rate house purchase rates up to 75 per cent LTV have fallen by up to 0.1%. Pricing starts from 5.84% at 60% LTV.

Five-year fixed rate house purchase rates have fallen by up to 0.6%, with pricing beginning from 5.29% at 60%LTV.

The cuts come at the end of week in which lenders including Natwest, Barclays, Skipton and Accord have all sliced their mortgage rates.

‘A positive boost for the market’

Jamie Lennox, director at Dimora Mortgages, said that it was “great to see the UK’s biggest mortgage lender return with a further reduction on selected products”.

“This is a positive boost for the mortgage and property market given that markets are baking in further base rate increases following core inflation remaining sticky.

“It’s likely that the speed at which rates went up caused a firm halt in the number of new applications being received and we may now see lenders chasing their tails in the months to come to try and make up for being behind on their targets for the year. Only time will tell, but we hope to see more to follow,” he added.

Peter Stamford, director and lead adviser at Moor Mortgages, said: “Halifax is making assertive moves to bolster its mortgage portfolio, a likely response to the subdued business volumes in recent months.

“With markets anticipating further base rate hikes due to persistent core inflation, the UK’s leading mortgage lender’s rate reductions may be short-lived. As the industry sees a slowdown in new applications, other lenders might soon follow Halifax’s lead. Borrowers should seize these opportunities, but with caution, as the financial climate remains unpredictable.”