The Halifax is cutting rates by up to 0.3% on selected mortgage products tomorrow.
Homemover and first-time buyer products will see rate reductions on selected products up to 0.11% and product transfer and further advance products will see rate reductions of up to 0.30%.
Remortgage products will see rate increases on 1.5 year fixed rate products of up to 0.07% and rate reductions on selected products of up to 0.30%.
Newspage asked brokers for their views.
CHAIN REACTION
Andrew Montlake, managing director at Coreco, said: “Where the Halifax goes other lenders tend to follow so these cuts could trigger a chain reaction across the lending community.
“The markets have baked in a rate cut on Thursday and there will almost certainly be more cuts throughout the year given the febrile state of the economy. Cuts of up to 0.3% are a win for borrowers and can really help with affordability.”
CUTS ARE NAILED-ON
Emma Jones, managing director at Whenthebanksaysno.co.uk, said: “January was a damp squib of a month but February is really starting to fire on the rate front.
“Lenders appear to be pre-empting this week’s rate decision with the markets saying a cut is a nailed-on certainty. It’s only the fourth of the month and we’ve already had a number of major lenders announce cuts. Rates are finally starting to move in the right direction for borrowers.”
FRONT OF THE QUEUE
Ben Perks, managing director at Orchard Financial Advisers, said: “Halifax have just made a dominant move ahead of this week’s base rate announcement.
“Halifax want to be firmly at the front of the queue. They seem as sure as many in the industry that there will be a cut on the 6th and more competitive rates are on the horizon. Swap rates are better and things appear to be brightening up for borrowers.”
MORE COMPETITION
Rohit Kohli, Director at The Mortgage Stop, said: “This move by Halifax is certainly welcome news for borrowers and could be an early sign that the rate cuts we’ve all been waiting for may finally be kicking in.
“While January’s anticipated rate war never really materialised, it’s clear that lenders are beginning to reposition ahead of a potential base rate cut, which the markets already appear to be pricing in.
“If other lenders follow suit – and that seems increasingly likely – we could see more competition heat up in February, benefitting borrowers who’ve had a tough time dealing with high rates over the past year.”
GOOD NEWS
David Stirling, Director at Mint Mortgages & Protection, said: “Halifax become the latest lender to reprice their mortgage rates on the back of a pretty inevitable base rate cut on Thursday from Threadneedle Street.
“Any movement downward is to be welcome and this week so far has delivered some good news to borrowers.”
MARGIN GAIN
Jack Tutton, Director at SJ Mortgages, said: “Halifax’s significant cuts could be a further sign that the Bank of England will vote to reduce the base rate on Thursday when the Monetary Policy Committee next meets.
“It has been widely reported that a cut in February has been on the cards for a while, and these cuts suggest that this is very much the case.
“Swap rates have been reducing over the past couple of weeks and there is a big margin between what they are now versus a month ago, so more lenders will follow Halifax should this continue.”
GAUNTLET IS DOWN
Dariusz Karpowicz, Director at Albion Financial Advice, said: “Halifax has thrown down the gauntlet! The lending giant’s bold move to slash mortgage rates by up to 0.3% is setting the cat amongst the pigeons in Britain’s mortgage market.
“As the nation’s largest residential lender makes its move, it’s rather like watching the first domino fall in what could be a rather exciting chain reaction across the lending landscape.
“With the Bank of England’s rate decision looming this Thursday, Halifax appears to be jumping the gun with impressive timing. The markets are already pricing in a rate cut, and this savvy move by Halifax suggests they’re rather keen to be ahead of the pack.”
MORE TO FOLLOW
Michelle Lawson, Director at Lawson Financial, said: “Lenders look like they are starting to price in a rate reduction from the Bank of England this week, which is good news for borrowers.
“Expect more to follow as swaps appear to also be decreasing.”
UPBEAT MOOD
Daniel Hobbs, Chief Executive at New Leaf Distribution, said: “The mood music in February is considerably more upbeat for borrowers than it was in January.
“With the Bank of England expected to cut rates later this week, lenders are reacting accordingly. Things are starting to feel a little more positive.”
FAVOURABLE SWAPS
Elliott Culley, Director at Switch Mortgage Finance, said: “Mortgage lenders are preparing for the expected base cut due this week, by releasing new reduced rates.
“Swap rates have been more favourable over the last week and this is now starting to reflect in rates starting to reduce. More to come over the next week or so.”
MARKET SHIFT
Harps Garcha, Director at Brooklyns Financial, said: “Halifax has now joined the other mainstream lenders in cutting rates.
“The big question is are we seeing momentum build ahead of a potential Bank of England base rate cut on Thursday?
“Or is this more about falling swap rates, possibly influenced by concerns over a renewed Trump ‘trade war’, which could be temproary. Either way, it’s another shift in the market worth keeping an eye on.”
