The price-dropping trend of 2023 has continued into this year as HSBC, Leeds Building Society and Halifax announced a raft of mortgage cuts for borrowers.
As the sound of fireworks and countdowns drew to a close, Halifax wasted no time in slashing rates for borrowers in the remortgage, product transfer and further advance market.
Much like last year, HSBC also made giant reductions across its remortgage market, with rates plummeting below 4%.
A five-year fixed rate for remortgage customers now stands at 3.94% up to 60% loan to value (LTV) with the lender. Two-year fixes are lower than 4.50% for the first time since June 2023 as borrowers can take advantage of a 4.49% rate if there’s at least 40% equity held in their home. Further, a ten-year fix with the lender is now available from 3.99%.
Halifax’s product transfer and further advance products have been sliced by 0.92% and there is good news for borrowers looking to remortgage.
They can enjoy drops of up to 0.83% on two, five and 10-year fixes, while completion dates have also been extended by a month by the lender.
A two-year fixed rate with a £999 fee up to 75% LTV is now priced at 4.81%.
Average two-year fixed residential mortgage now 5.92%
Leeds Building Society has also hammered prices down across residential, shared ownership and buy-to-let deals.
A two-year fixed purchase and remortgage rate of up to 75% LTV is available at 4.6% and has fees-assisted in-house legal service for remortgages. The mutual’s two-year purchase fixed rate of up to 95% LTV is now on the market at 5.59%.
Those deals require a completion charge of £999, free standard valuation of the same amount and early redemption charges of 2.5% in the opening year. Following that, it’s 1.5% in the second year of the amount redeemed. Each deal allows a 10% penalty-free capital overpayment per year.
In the shared ownership market, there is a fresh five-year fixed rate on offer, available up to 95% borrower-share which is priced at 5.59%. This deal has no completion fee and valuation is also complimentary. Early redemption charges start at 5% and 10% penalty-free capital overpayments are allowed each year.
According to Moneyfacts data, the average two-year tracker rate is 6.15% and the average two-year fixed residential mortgage rate is 5.92%.
HSBC mortgage cuts ‘hopefully a signal’ more lenders will drop prices
Borrowers after a buy-to-let deal can enjoy a fixed rate of a maximum 60% LTV for 5.55%. This also has a free completion and valuation as well as fees-assisted legal service for in-house remortgages. It also has an early redemption charge worth 2.5% and then 1.5%.
The average five-year buy-to-let residential mortgage rate today is 5.89%, according to Moneyfacts, which is lower than the 5.91% when January kicked off.
This year’s mortgage rate reductions ‘have started with a bang’
In what’s been predicted to be a ‘resilient year’ for the housing sector, David Hollingworth, associate director at L&C Mortgages believes these cuts are “just the latest salvo in an increasingly fast-moving market.”
He said: “These rates are offering some of the lowest rates since the spike in rates last summer. Although borrowers coming to the end of their current fixed rate this year will still be looking at a rise in payments, these new lower rates will at least take some of the sting out of the inevitable rise.”
“HSBC’s move is notable in that its rates are on offer to those borrowers looking to remortgage, a departure from the recent trend of pricing favouring home movers.”
Hollingworth added: “With large numbers of borrowers anxiously approaching the expiry of a fix taken during the ultra low-rate period, this is a welcome move and hopefully a signal for more lenders to follow suit, improving options for those facing payment shock.
“These cuts follow hot on the heels of New Year improvements by Halifax and others will be bound to follow suit. We thought the New Year would start with a bang and that’s proving to be the case.”
