Intense competition among four major UK lenders results in reduced mortgage rates

In a move that could bring some relief to homebuyers, several major banks have announced reductions in their fixed mortgage rates. Halifax, part of Lloyds Banking Group, has joined the trend by reducing rates across its mortgage range.

Starting tomorrow, Halifax will offer a five-year fixed rate currently priced at 6.10% at a reduced rate of 5.39%. The specific rates for Halifax's new mortgage deals have not been disclosed yet.

Nationwide has also jumped on the bandwagon, reducing fixed mortgage rates by up to 0.55 percentage points, effective from Wednesday.

Other lenders such as HSBC, Nationwide, and TSB have also followed suit. HSBC is cutting some of its fixed rates by up to 0.35%.

The average rate on a new-fixed deal lasting for two years has decreased to 6.83%, while the typical rate on a new five-year fix has decreased to 6.34%.

The recent positive inflation data has helped reverse the huge jump in fixed rates, although to a small degree. However, it's important to note that the Bank of England's recent interest rate increase to 5.25% is not directly mentioned as affecting the new mortgage rate reductions in this context.

David Hollingworth, an associate director at broker L&C Mortgages, stated that the trend of improvement in fixed mortgage rates is continuing. He also suggested that further rate reductions might occur from those lenders who have already lowered rates. Chris Sykes, technical director at the broker Private Finance, echoed this sentiment, stating that more lenders are likely to follow this trend.

However, borrowers should not expect rates to return to their pre-surge levels, according to David Hollingworth. The European Central Bank (ECB) may conduct further interest rate cuts in the future to ease lending restrictions, and other banks may follow this example; however, banks remain cautious due to economic weakness and increased risks, so significant easing is expected only with notable economic recovery and reduced uncertainty.

As competition begins to heat up, it's possible that further rate reductions may occur from lenders who have already lowered rates. This could provide some much-needed relief for homebuyers navigating the current economic climate.

Intense competition among four major UK lenders results in reduced mortgage rates