Halifax joins Santander in lowering mortgage rates as sub-5% fixed deals make a comeback

Halifax is the latest major mortgage lender to announce rate cuts, raising hopes that more banks and building societies will reduce their mortgage rates over the coming days.

Santander and Nationwide Building Society are currently among the most competitively priced lenders, with a growing number of fixed-rate mortgages available below 5% again.

Just a few days ago, it looked as though virtually all sub-5% fixed-rate mortgages would disappear following a succession of increases from the UK's biggest lenders. However, the market has changed direction, and at least six lenders are now offering selected fixed-rate deals below 5%, according to Trinity Financial's latest market review.

The sudden turnaround highlights how quickly mortgage pricing can change and why borrowers should continue monitoring rates, even after receiving a mortgage offer.

Halifax announces new mortgage rate reductions

Halifax has confirmed it will reduce selected two, three and five-year fixed-rate mortgages for first-time buyers and homemovers by up to 0.10 percentage points from Friday 9 October.

The reductions follow Santander's decision to lower selected fixed and tracker mortgage rates on Tuesday 6 October.

Halifax is also offering eligible Lloyds Premier customers a 0.20 percentage point discount on selected standard fixed rates, making some of its mortgages particularly competitive for higher earners.

Based on the rates currently available, eligible Lloyds Premier customers can access:

• Two-year fixed rate around: 4.90%

• Three-year fixed rate around: 4.85%

• Five-year fixed rate around: 4.9%

These rates could become even more attractive following the latest Halifax pricing changes, although the final rates will depend on which mortgage products are reduced.

Eligibility criteria, deposit requirements and product fees apply.

Santander brings back more sub-5% fixed-rate mortgages

Santander has also improved its mortgage pricing, with reductions across selected new business fixed and tracker deals from Tuesday 6 October.

The bank is offering some of the most competitive fixed rates, including:

• Two-year fixed rate around: 4.90%

• Three-year fixed rate around: 4.90%

• Five-year fixed rate around: 4.95%

Santander has also reduced selected tracker rates in its product transfer range, although some existing-customer fixed rates have increased.

Why are mortgage lenders cutting rates again?

Fixed mortgage rates are heavily influenced by wholesale funding costs, particularly swap rates, rather than simply following changes to the Bank of England base rate.

Following the sharp increases in mortgage pricing during September and early October, some lenders are now adjusting selected products to compete for new borrowers.

There is also speculation within the mortgage market that other major banks could announce reductions over the next few days.

While this is encouraging news, it does not necessarily mean mortgage rates will continue falling. Market conditions remain volatile, and banks can increase or reduce their pricing at relatively short notice.

Already have a mortgage offer? You could still secure a cheaper rate

One of the biggest mistakes borrowers can make is assuming that once they have received a mortgage offer, they cannot benefit from any subsequent rate reductions.

In many cases, a mortgage broker can request a lower interest rate from the same lender before the mortgage completes.

For example, a borrower who secured a five-year fixed rate at 5.20% may be able to switch to a newly introduced 4.90% product if their lender reduces its rates and they meet the relevant criteria.

This could save a substantial amount of money over the initial fixed-rate period.

The process varies between lenders, and a new product fee, updated offer or further checks may be required. However, it is worth investigating whenever cheaper rates become available.

Borrowers should also be aware that switching to another lender can involve a new application and additional costs, so the overall saving needs to be considered.

Aaron Strutt, Product Director at Trinity Financial, comments:

"The mortgage market has been incredibly volatile, and it is encouraging to see some of the big lenders reducing rates again.

"Just a few days ago, it looked as though virtually all the sub-5% fixed rates would disappear, but Santander, Halifax and Nationwide Building Society are offering borrowers some much-needed competitive options. NatWest also has some sub-5% mortgage options.

"There are rumours that more of the large banks are preparing to reduce their rates, so hopefully we will see further improvements over the coming days.

"This shows why it is so important to keep monitoring mortgage rates even after an offer has been issued. If a lender introduces a cheaper deal before completion, we can often request the lower rate for our clients.

"Borrowers could potentially save thousands of pounds over their mortgage deal simply because their broker continues monitoring the market."

How Trinity Financial helps borrowers secure competitive mortgage rates

At Trinity Financial, our mortgage brokers monitor mortgage rates across a wide range of banks, building societies and specialist lenders.

Whether you are a first-time buyer, moving home or remortgaging, we can help you compare fixed and tracker mortgages, assess lenders' affordability criteria and identify suitable products.

Importantly, our service does not end when your mortgage offer is issued. We can continue reviewing available mortgage rates before completion and investigate opportunities to switch to a cheaper deal where permitted.

Speak to a Trinity Financial adviser today

The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your options.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

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