Lenders sacrifice profits for volume as rates fall yet again

The war between rival mortgage lenders continues with Halifax late last week undertaking its second re-price of the year (and it’s not even mid-January yet).

Following moves by Barclays and Santander last week, and despite a small uptick in swap rates, Halifax still felt there was ground to pass on reductions to win more business.

“Lenders are showing that they have enough appetite for volume, even at skinny margins, to continue to battle and hold on to their current low rates longest. It’s been a while since we’ve seen lenders prepared to sacrifice margin for volume, welcomed news for purchasers and those coming to the end of their fixed deal” explains Nicholas Mendes, head of marketing at John Charcol.

Halifax’s second residential price cut of the year saw fixed-rate home loans reduced by a further 45 basis points.

Highlights include two-year purchase fixes up to 85 per cent loan to value, at 4.57 per cent, with a £999 fee, down by 45bps; two-year purchase fixes up to 85 per cent LTV, at 4.27 per cent, with a £999 fee, down by 35bps; and five-year purchase fixes up to 85 per cent LTV, at 4.18 per cent, with a £999 fee, down by 39bps.

Halifax head of intermediaries and Scottish Widows Bank Amanda Bryden says: “There is increasing confidence in the market and rates are falling. These cuts will be a boost to anyone looking to get on or move up the housing ladder.”