Mortgage lenders are rushing to trim mortgage deals as they anticipate the Bank of England is close to reaching the peak on interest rates.
Halifax, part of Lloyds Banking Group PLC (LSE:LLOY), and Nationwide Building Society's The Mortgage Works (TMW) have both today announced further cuts to their fixed rate products, with both lenders cutting up to 0.50% off selected deals.
TMW, a specialist buy-to-let lender, also announced a five-year fixed rate deal at 4.99%, which is the first sub-5% deal that brokers say they have seen for months.
Earlier in the week Santander UK and the Nationwide, Skipton and Coventry building societies all announced cuts on their mortgage ranges or the launch of new cheaper products.
Santander pledged to cut purchase rates and launched new products, while Coventry said it will launch a new range on Friday.
Halifax’s new deals is a two-year fixed rate for remortgage at 5.64% (60% LTV) with a £999 fee and a five-year fixed rate equivalent at 5.15%.
Swap rates, which banks use to price mortgages, have retreated in recent weeks as Bank of England governor Andrew Bailey said the UK was near the top of the rate cycle, as the economy slows and BoE surveys find firms are expecting price and wage growth to slow.
Diarmuid Phoenix of Belfast-based Mint Mortgages & Protection said today's were a "welcome response" to changing conditions.
He said the return of rates under 5% "should hopefully give a boost of confidence to borrowers who have been living in fear of the end of their current fixed rate deals, as well as those who have been sitting on the fence, waiting for rates to come down before purchasing".
Gary Bush, financial adviser at MortgageShop.com said: “The mortgage rate war is well and truly underway and it's looking likely that there will be a busy end to 2023.”