Halifax Launches 0.83% Mortgage Amid “Lender War.”

Halifax will offer an ultra-low rate on a fixed, two-year agreement.

Halifax has fired the latest salvo in the price war among mortgage lenders with the launch of a two-year fixed rate deal priced at 0.83%.

The announcement of the ultra-low rate, which is available through mortgage brokers since Monday for those who want to obtain a loan worth up to 60% of the value of their home, comes amid a wave of rate cuts by some of the biggest in the UK lenders.

Last month, HSBC and TSB announced two-year mortgages at 0.94%, and construction company Nationwide became the first to offer a five-year deal below 1%.

The Halifax mortgage comes with a £ 1,499 fee and is available for purchases between £ 250,000 and £ 1 million.

It joins a growing number of deals below 1% for borrowers with large deposits.

Rhys Schofield, managing director of broker Peak Mortgages and Protection, said: “Where the UK’s largest mortgage lender goes, surely others will follow.”

But he cautioned: “These headline hoarders often come with significant setup fees, and Halifax is the only street lender that still charges for a basic appraisal, which means that for many people, the cheapest deal overall is often found elsewhere.”

“It is the lowest interest rate in many years.”

Lewis Shaw, a founder of broker Shaw Financial Services, said the Halifax rate was “tremendously low.”

“I’ve never seen anything like this in all the years I’ve been trading,” he said. “What this really tells us is not that the lenders want a rate war, but that the lenders are as keen as mustard in having very low-risk businesses on their books, probably to balance the higher loan against the value of the loans they have had hands forced to enter.”

The competition to attract borrowers comes amid signs that Britain’s house price boom is cooling down.

Prices rose 0.4% in July, the first month since buyers in England and Northern Ireland had to deal with a less generous stamp duty holiday, according to Halifax data released last week.

House prices have risen sharply in the past year, helped by Chancellor Rishi Sunak’s decision to remove the stamp duty on purchases in England and Northern Ireland up to £ 500,000. The tax exemption was limited to homes up to £ 250,000 in early July and will return to £ 125,000 in October. The holidays are over in Scotland and Wales.

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