Mortgage Rate Cuts: Halifax, First Direct, HSBC UK Lead


Major lenders have announced further cuts to UK mortgage rates, widening choice for borrowers looking for deals below 5%.

First Direct, a subsidiary of HSBC UK Bank PLC, announced rate cuts of up to 0.40 percentage points from Tuesday.

Halifax, a subsidiary of Lloyds Banking Group PLC, also announced cuts to its mortgage rates of up to 0.46 percentage points from Wednesday.

This includes a reduction of 0.24 percentage points on the five-year fixed rate for borrowers with a 10% deposit, to 4.97%.

The lender will also reduce the five-year fixed rate for borrowers with a 40% deposit by 0.20 percentage points, to 4.53%. Both Halifax offers come with a GBP999 fee.

HSBC UK is also expected to make numerous cuts to its mortgage rates on Wednesday. Details have not yet been announced.

First Direct said this was the biggest round of mortgage rate cuts it has made since February this year.

It also launched two new mortgages for borrowers with a 5% deposit.

First Direct now offers a rate as low as 4.74% for new and existing customers looking for a five-year fixed rate deal, with a 40% deposit.

Liam O’Hara, head of mortgages at First Direct, said: “Following today’s rate cuts, several of our mortgage products are now priced below 5%. Our switching rates have also been significantly reduced to ensure existing customers have competitive options when looking to remortgage.”

He added: “We are also committed to increasing the availability of products for those looking to access property with a lower deposit, which is why today we are also launching new products in the 95% space LTV (loan-to-value).

The Bank of England’s base rate hikes have recently stalled after 14 consecutive increases.

According to figures from financial information site Moneyfacts, across all deposit sizes, the average two-year mortgage rate for homeowners in the market on Tuesday morning was 6.21 per cent. This rate is down from the average rate of 6.22% recorded on Monday.

The average five-year mortgage rate for homeowners was 5.80% Tuesday morning, down from Monday’s average rate of 5.81%.

James Hyde, spokesman for, said Nationwide Building Society and Virgin Money UK PLC were also among the lenders which had reduced their mortgage rates.

He said: “These rate cuts from First Direct are emblematic of recent mortgage rate cuts offered by a number of major lenders.

“For some time, five-year fixed rate products have been available at less than 5%, but the lowest rates are now comfortably below this threshold.”

Lewis Shaw, director of independent mortgage broker Shaw Financial Services, based in Mansfield, told the Newspage website: “Halifax is getting into the fray again and cutting rates to almost 4.5 per cent, which is sure to set fire to the powder.

“Hopefully this will give a boost to the market and encourage other lenders to sharpen their pencils or risk losing out.”

HSBC shares were down 0.5% at 605.00 pence each on Tuesday afternoon in London, Lloyds Banking shares were down 0.9% at 41.66 pence each, and Virgin Money UK shares were down 0.1% to 163.50 pence each.

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