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Halifax cuts mortgage rates

Dominic Welling dominic.welling@consumerchoices.co.uk

Halifax borrowers could get 0.50% off their mortgage rate till the end of next year.

Halifax - part of the Lloyds Banking Group - has reduced the rates across its entire mortgage range.

Borrowers who apply for a Halifax mortgage between 6 September and 3 October 2010 will get a reduction of at least 0.30% off their mortgage rate until the end of 2011.

Meanwhile customers who have a Halifax current account will benefit from a further 0.20% reduction – meaning they'll see a reduction of 0.50% until the end of next year.

Stephen Noakes, commercial director of mortgages at Halifax, said: "The Halifax Great Rate Cut sees us making significant reductions across our whole product range for homebuyers.

"We know that the first year in a new home can be expensive, so this rate cut should make a helpful difference for customers."

Halifax has also launched a two-year tracker for both home movers and first-time buyers.

The deal offers a rate of 2.49% until the end of 2011, followed by 2.79% for a further year.

New and existing current account customers can access a rate of 2.29% until the end of next year, when they'll move on to 2.59%.

The tracker is available for people with a 40% deposit and has a fee of £1495.

Although this two-year tracker is up there with some of the better products in the market, there are some mortgage deals available which offer higher loan-to-values (LTV) for similar rates.

For example, Santander currently offers a two-year tracker at 70% LTV with a starting rate of 2.59%.

Meanwhile, ING Direct offers a two-year tracker at 80% LTV with a starting rate of 2.84%.

Chris Eagle, director of marketing at Creditchoices.co.uk, said: “Whether you should opt for a fixed or tracker product at the moment is completely dependent on you individual circumstances.

“Interest rates are expected to remain low for some time so a tracker rate would probably be the best choice if borrowers want to take advantage of the cheapest rates.

“However, you also need to consider how well you will cope with any future rate hikes and the consequent increase in mortgage payments if that happens.

“Whatever your position, it is imperative that you shop around and compare all the different mortgage products on the market and choose one to suit your individual needs.”