Halifax cuts mortgage rates again

Written by Editorial Team

25 July 2008 / by Rebecca Sargent

Halifax has announced it is cutting the interest rates on some of its mortgage products for the third time in a month.

As of tomorrow, mortgage products offered by Halifax and its sister company Bank of Scotland will be cut by up to 0.30 per cent and 0.45 per cent respectively.

Across the Group, 45 mortgage products will be cut, including fixed rate and large loan products. The news comes amid news from other lenders of similar interest rate cuts. Yesterday, Yorkshire Building Society announced cuts and earlier this month leading lender Nationwide sparked the trend.

Speaking of the new trend of mortgage rate cuts, initiated by Nationwide, Drew Wotherspoon of Charcol.co.uk, said: “For far too long, the status quo of the mortgage market has been increasing rates and misery for most borrowers. The crunch has seen liquidity in the market all but dry up.”

The Government launched its Special Liquidity Scheme in an attempt to alleviate pressure felt by lenders who were desperately trying to shore up their balance sheets after the sub-prime mortgage fiasco. And it seems that the scheme is finally beginning to filter down to borrowers.

Mr Wotherspoon added: “Swap rates, the starting point that lenders use to determine the price of their fixed rates, have fallen dramatically over the last few weeks, coming down 0.7 per cent from their peak a month ago. Even bad news on inflation has failed to dent their progress downwards, and now lenders are, theoretically at least, able to offer better priced products.

“I would hope to see other lenders follow suit soon bringing some much needed competition to a market that has been depressingly bereft of vying lenders,” he added.

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