Major bank cuts mortgage rates and now has a 3.79% best buy - here's who can get it
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.
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.'
How to find a new mortgage
Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible.
Quick mortgage finder links with This is Money's partner L&C
> Mortgage rates calculator
> Find the right mortgage for you
What if I need to remortgage?
Borrowers should compare rates, speak to a mortgage broker and be prepared to act.
Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.
Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees.
Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone.
What if I am buying a home?
Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be.
Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.
How to compare mortgage costs
The best way to compare mortgage costs and find the right deal for you is to speak to a broker.
This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice.
Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.
If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
> Find your best mortgage deal with This is Money and L&C
Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
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