- One lender is cutting rates by up to 0.35% and the other by up to 0.24%
Two mortgage lenders have announced they will be cutting rates on some of their fixed home loans.
Halifax will make interest rate cuts of up to 0.35 per cent from tomorrow, while Leeds Building Society will reduce its rates by up to 0.24 per cent.
Most households with a good credit record can secure a mortgage rate of between 4 and 5 per cent at the moment.
The lowest fixed rate deals remain just above 4 per cent, with five-year fixes slightly cheaper than more popular two-year deals.
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Off with a bang: From tomorrow Halifax is cutting remortgage rates by up to 0.35 percentage points for new customers
There is expected to be more appetite for new mortgages in 2025, with UK Finance forecasting a 10 per cent rise in lending for house purchases and a 30 per cent increase in remortgage lending.
At present, a household with at least 40 per cent equity built up in their home can secure remortgage rates as low as 4.08 per cent when fixing for five years.
On a £200,000 mortgage that would equate to £1,065 a month for five years, based on a 25 year repayment term.
Halifax says tomorrow’s rate changes will only apply to 18 month and three year remortgage products only.
Its lowest 18-month fixed rate will drop to 4.22 per cent tomorrow while its lowest three year fix will fall to 4.41 per cent.
Mortgage brokers welcomed both Halifax and Leeds Building Society’s cuts, and said the moves could act as a catalyst for further rate reductions in January.
Darryl Dhoffer, founder at The Mortgage Geezer told the news agency, Newspage: ‘Halifax is the first big lender to fly out of the blocks in 2025, reducing interest rates for those remortgaging.
‘This could be the catalyst for many other lenders to follow suit as lenders will want to start the new year positively. Expect more cuts from lenders later this week and next.’
Justin Moy, managing director at EHF Mortgages added: ‘Early moves by Halifax and Leeds Building Society on New Year’s Eve suggest a mini rate war will rage at the start of January, which can only be great news for borrowers.
‘With huge numbers of borrowers looking for a new deal on their mortgage in 2025, it will be important to reserve deals whilst rates are favourable, and January will be an ideal time to take advantage. Other lenders will follow in the coming days without doubt.’