Britain’s biggest mortgage lender has unveiled the cheapest home loan deal since May for those who are looking to remortgage.
Halifax has launched a two-year fix for those who already own their home at a rate of 3.83 per cent.
It comes with a large fee of £1,499, but it is the cheapest remortgage deal since Santander pulled its 3.82 per cent deal back in May.
Households will have to have 40 per cent equity in their property to access the rate.
Halifax’s latest cuts comes as part of a slew of reductions from big-name lenders.
HSBC has announced its third rate cut in just two weeks, and its second within a matter of days, from Friday.
Nationwide has also said it will cut rates by up to 0.2 percentage points from Thursday.
Barclays made several cuts on Wednesday as well in what experts have referred to as a price war.
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Nick Mendes of John Charcol brokers said: “We have begun the next price war. With multiple big names now making successive reductions and competition intensifying by the day, the battle for best-rate positioning is well and truly under way.
“It would be no surprise to see further movement from other major lenders in the coming days.”
Mortgage rates are falling across the board and this is partly because swap rates, the rates at which banks lend to one another and a major determinant of mortgage pricing, have fallen in recent weeks, which gives lenders more room to decrease costs for households.
These rates tend to follow long-term predictions for where the Bank of England base rate will go in the future.
The Bank of England Governor, Andrew Bailey, has appeared to confirm more cuts to the base rate were on the way later this year.
After some lenders started to cut rates, others followed, sparking competition as well.
Bailey, speaking to CNBC last month, said: “I think that the path of interest rates will continue to be gradually downwards. I haven’t changed my mind on that.”
While Bailey stopped short of confirming a cut in August, his remarks have been interpreted by economists as a strong indication that a reduction is probable.
Interest rates currently sit at 4.25 per cent, but markets are increasingly pricing in the likelihood of two quarter-point cuts by the end of the year.
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