Another big lender has joined the "sub-4 per cent club" as Halifax announces cuts to mortgage products.
Halifax recently announced cuts of up to 0.16 per cent on selected products including introducing a 5-year fixed rate at 3.99 per cent with £999 fee up to 60 per cent LTV.
As well as a 2-year fixed rate at 4.36 per cent with £999 fee up to 60 per cent LTV.
Contractor Mortgage Services director, Ken James, said the announcement is an example of “another big lender joining the sub-4 per cent club” but added while this is “great news”, it won’t be available to the masses “who don’t have access to larger deposits”.
“For the standard client who has struggled to possibly raise a 10 per cent deposit this will not give them any relief financially,” he said.
While, SJ Mortgages director, Jack Tutton, said Halifax’s cuts “continue to push the market in the right direction”.
He said Halifax’s cuts are for home movers and first-time buyers, with the lowest rates at 60 per cent loan to value.
However, Tutton acknowledged more could be done for products requiring a smaller deposit.
“It is people with these levels of deposit that are the key to getting more impetus back into the property market,” he added.
Repossession Rescue Network founder, Patricia McGirr, described the cuts as “right on target but still wide of the mark”.
She said, while rate drops are always welcome for borrowers and congratulated Halifax for getting onboard.
She said: “When will lenders get the message and extend favourable fixed rates to those with higher loans to value?
“We’ve been encouraged to borrow the max to buy homes, but when money is tight, the borrower is penalised.”
Mortgage broker, Darryl Dhoffer, from The Mortgage Expert, also urged caution. He said: “Some may say, based on bigger reductions from their competitors, it’s like throwing a pillow in a heavyweight bout.”
He added: “History tells us that Halifax stay the distance when other lenders may withdraw rates at the toss of a coin”.
Looking to the future, Lawson Financial's Michelle Lawson, said the industry should expect more lenders to reduce their rates to sub 4 per cent in the coming weeks as “swap rates are finally coming down”.
“We are on the cusp of a market change so buyers should be looking at acting sooner rather than later.”
Thanks to the Newspage community for sharing their thoughts with FTAdviser.
tom.dunstan@ft.com
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