Halifax and Leeds Building Society slash fixed mortgage rates in boost for homeowners

Halifax made a 0.83 percentage point cut on a two-year fixed-rate for existing customers whose old deal is ending, from 5.64 per cent to 4.81 per cent.

Leeds Building Society cut rates on 90 deals by as much as 0.49 per cent. Its lowest two-year fixed rate deal fell to 4.6 per cent.

Graham Cox, founder of the broker Self Employed Mortgage Hub, told The Times: “Halifax reducing rates by up to 0.92 percentage points is a reflection that they were far from being the cheapest at the end of last year.

“With the decks cleared, they’re ready to take on new business and get some early sales in, so have slashed rates. Other lenders will follow soon no doubt; competition in this slow market is fierce.”

Banking and finance industry trade association UK Finance recently said it expects mortgage lending to fall in 2024, as the number of arrears and repossessions increases.

UK Finance added that, while it will take some time for the pressure on household finances to recede, it expects the situation to improve in 2025.

Fixed mortgage rates have been cut in recent months amid expectations for the wider economy, but many homeowners who are moving onto a new fixed deal are likely to be paying significantly higher rates than they have been used to.

According to financial information website Moneyfactscompare.co.uk, across all deposit sizes, the average two-year fixed-rate mortgage on the market at the start of 2023 was 5.79 per cent.

At the start of December, the average two-year rate was 6.04 per cent and it has recently fallen back below 6 per cent.