Halifax has cut its mortgage rates and now offers the cheapest two-year fix.
The lender has reduced its lowest two-year fixed rate for people remortgaging from 4.1 per cent to 3.79 per cent, which makes it a best buy.
It is one of several banks and building societies to now offer rates below 4 per cent to those remortgaging or buying with a large deposit or equity.
The headline rate is available to those who are taking a mortgage of £250,000 or more, and have a deposit of at least 40 per cent.
This means they will need to own a home worth at least £417,000. The mortgage also comes with a large fee of £1,999.
Remortgage rates: Halifax has reduced its cheapest deal to 3.79% on a two-year fix
Borrowers need to weigh up rates and fees carefully, as adding the fee to the loan may cost them more in the long term than taking a slightly higher rate.
They can do this using This is Money’s true cost mortgage calculator.
Borrowers wanting to take this mortgage must also be a new Halifax customer, with rates for existing customers slightly higher.
The next-cheapest deal available for the same circumstances is 3.88 per cent with NatWest. This comes with a lower fee of £1,495.
HSBC is also offering 3.88 per cent on a two-year fix, but only to customers with a Premier bank account.
Jack Tutton, director at Hampshire-based broker SJ mortgages, told news agency Newspage: ‘The mortgage market is really hotting up and Halifax has stolen the march with its latest cuts.
‘Their headline rate of 3.79 per cent will be a game changer and will make other lenders consider their pricing.’
For those looking for a five-year fix, Halifax has a rate of 3.88 per cent, also on a 40 per cent deposit and for those remortgaging with loans of £250,000 or more. It also has a £1,999 fee.
The biggest reduction was to its fee-free two-year fixed remortgage product for a 40 per cent deposit , which was reduced from 4.85 per cent to 4.51 per cent.
Lenders are reducing rates for several reasons, one of which is the likelihood for further falls in the Bank of England’s base rate.
They are also trying to win customers, amid worries that the increase in stamp duty on 1 April might slow the housing market.
Figures from the Bank of England today suggested that fewer people are taking out mortgages to buy a home.
Mortgage approvals for house purchases fell 1.2 per cent in March — the third monthly drop in a row.
Because mortgages are usually approved weeks or months before a property purchase completes, those getting a mortgage in March would be very unlikely meet the deadline for reduced stamp duty.
Nick Maud, director of research at agent Savills, said: ‘Activity peaked in October and December 2024, likely driven by first-time buyers rushing to beat the stamp duty nil-rate deadline. However, momentum has trailed off thereafter.
The prospect of further cuts to the base rate and the loosening of lending regulations, as proposed by the Financial Conduct Authority, may help to stimulate demand over the coming months.’