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Britain’s biggest lenders cut rates on mortgage deals

Four of Britain’s biggest lenders have cut rates on their fixed mortgage deals, easing some of the pressure on hard-pressed homeowners.

Halifax, part of Lloyds Banking Group – the UK’s biggest mortgage lender – is reducing rates by up to 0.71 percentage points from Friday. That means a five-year fixed rate, currently priced at 6.10%, will be offered at 5.39%.

It also emerged that average rates on new two- and five-year fixed mortgages have fallen slightly.

Mortgage rates have risen rapidly as the Bank of England has pushed interest rates to tame inflation. Last week the Bank raised interest rates for the 14th consecutive time, bringing the base rate to 5.25%.

Relentlessly increasing housing costs have piled further pressure on Britons already struggling to cope with higher food and energy costs. Still, the cuts to rates – in some cases for the second time in a fortnight – will provide optimism that those costs may ease.

Moneyfacts, the financial data provider, said on Wednesday that the average rate on a new fixed-rate deal lasting for two years was now 6.83%, down from 6.84% on Tuesday. Meanwhile, the typical rate on a new five-year fix nudged down to 6.34% from 6.35%.

Halifax said on Wednesday that rates would be cut “across the range”, including deals aimed at homebuyers. HSBC is also cutting some of its fixed rates – it is understood by up to 0.35%.

The lender followed hard on the heels of Nationwide building society, which cut rates on its fixed mortgages by up to 0.55 percentage points with effect from Wednesday. Also, on Wednesday, TSB cut its new fixed rates by up to 0.4 percentage points.

David Hollingworth, an associate director at broker L&C Mortgages, said: “This continues the trend of improvement in fixed mortgage rates which has emerged since the positive inflation data last month. That’s now helping to reverse the massive jump in fixed rates, albeit to a small degree.

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