Halifax sparked the latest salute in the price war among mortgage lenders with the launch of a two-year fixed rate deal priced at 0.83%.
The announcement of the ultra-low rate, which is available through mortgage brokers from Monday to those who wish to take out a loan worth up to 60% of the value of their home, comes in the midst of a wave of rate cuts by some of the UK’s biggest. lenders.
Last month, HSBC and TSB both announced two-year mortgages at 0.94% and Nationwide Building Society became the first to offer a five-year deal below 1%.
The Halifax Mortgage has a fee of £ 1,499 and is available for purchases between £ 250,000 and £ 1 million.
It joins a growing number of transactions below 1% for borrowers with large deposits.
Rhys Schofield, managing director of broker Peak Mortgages and Protection, said: “Where the UK’s biggest mortgage lender goes, others will surely follow. “
But he cautioned: “With those headlines often comes a hefty setup fee and Halifax is about the only large-scale lender that continues to charge a basic appraisal, which means that for a lot of people. , the cheapest offer is often elsewhere. “
Lewis Shaw, the founder of brokerage Shaw Financial Services, said Halifax’s rate was “unbelievably low.”
“I’ve never seen anything like it in all these years that I’ve been doing brokerage,” he said. “What this really tells us is not that lenders want a rate war, but rather that lenders are as eager as the mustard to have very low risk business on their books, possibly to balance the higher loan compared to the value loans they had. forced hands.
Competition to attract borrowers comes as the boom in house prices in Britain slows down.
Prices rose 0.4% in July, the first month since buyers in England and Northern Ireland faced a less generous stamp holiday, according to data from Halifax released last week .
House prices rose sharply last year, helped by Chancellor Rishi Sunak’s decision to remove stamp duty on purchases in England and Northern Ireland up to £ 500,000. The tax break was limited to houses up to £ 250,000 in early July and will drop to £ 125,000 in October. The holidays are already over in Scotland and Wales.