Mortgage rates are dropping as Halifax launches a 0.9% loan … but is that the best deal?

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Halifax has launched the latest offensive in the mortgage price war and is now offering home loans at a record low rate of 0.9 percent.

The bank, which is part of the UK’s largest mortgage lender Lloyds Banking Group, has also struck several other deals aimed at high net worth property owners.

Borrowers with 40 percent deposits can now receive a two-year flat rate at 0.9 percent with a commission of £ 1,499 or 0.91 percent with a commission of £ 999.

How low can they sink?  Mortgage rates are falling, especially for stock-rich remorthers.

How low can they sink? Mortgage rates are dropping, especially for stock-rich remorthers.

Those looking for a longer fix can get locked out for five years at a 0.98% rate with a £ 1499 fee, or 1% with a £ 999 fee.

For borrowers looking for the lowest rate, they are the lowest currently on the market, although they could save money overall by choosing a higher rate with a lower down payment, as we explain below.

The deals are only for re-mortgages, while some other lenders offer rates below 1% for those who buy new homes as well.

However, one of the advantages of the Halifax deals is that they have much lower minimum loan requirements than other low-interest mortgages currently on the market.

All new Halifax rates are available on mortgages ranging from £ 25,000 to £ 1 million, while rival Nationwide, for example, only offers its 0.91 percent interest rate, which also includes a £ 1,499 commission, to those who borrows at least £ 275,000.

Halifax betting is only available from select brokers from today.

Mortgage rates fell to an all-time low thanks to huge demand for home relocation after the pandemic, coupled with large cash reserves of banks due to rising personal savings and the fact that they can borrow cheaply from the Bank of England base. the rate sits at 0.1 percent.

Are they the best deal?

If paying the lowest interest rate possible is the homeowner’s priority, then these Halifax deals are likely to fit the bill.

0.9% and 0.98% trades are the lowest two- and five-year rates on the market right now.

This is followed by Nationwide’s two-year flat rate of 0.91 percent, which is again only available to those with deposits of at least 40 percent, exclusive to those borrowing at least £ 275,000 and with a fee of £ 1,298.

However, a nationwide deal could be cheaper when you factor in commissions.

A homeowner re-mortgaging a £ 500,000 home with a £ 300,000 mortgage will pay £ 28,309 over two years with Halifax, up from £ 28,140 with Nationwide.

The same borrower who received the same mortgage at the Barclays 0.92% rate with a commission of £ 1,048 would pay £ 27,923.

Depending on the value of the home and the amount of the mortgage, homeowners can save even more money by paying a substantially higher rate without commission.

For example, a remyortgaore who has a new 0.9% Halifax deal with a £ 1,499 commission on a £ 400,000 home with a £ 220,000 mortgage would pay a total of £ 21,159 over a two-year period transactions.

The same borrower who did a 1.14% commission-free deal with NatWest or HSBC would have paid £ 20,236 over the same period, saving them over £ 900.

Compare rates and commissions and find the best deal with this is money calculator

Mark Harris, CEO of mortgage broker SPF Private Clients, said: “Halifax is the latest lender to go to war with mortgage rates.

“Those with significant equity in their homes will qualify for the best rates, although lenders are cutting rates across all loan and cost ranges, so even those with more modest capital or deposits will benefit.

“The low minimum mortgage for Halifax products – £ 25,000 – means that those repaying even relatively modest mortgages can take advantage of these low rates.

“Other lenders may well follow suit as cash-flooded banks compete for business. Borrowers are the winners, although of course they must calculate the total value of any transaction – rate plus commission – when comparing products. “

What about those with fewer deposits?

While the best deals are reserved for the wealthiest homeowners, rates are now trending downward for those with less significant deposits after a turbulent year in 2020, when rates went up and down as the property market closed and reopened.

According to financial experts at Moneyfacts, for the first time in a year, both the average two-year and five-year fixed rates fell in July.

Analysis by Moneyfacts shows that while the overall average mortgage rate did not hit the lows seen in the chaotic summer of 2020, it is on a downward trend again.

Analysis by Moneyfacts shows that while the overall average mortgage rate did not hit the lows seen in the chaotic summer of 2020, it is on a downward trend again.

Typical two-year fixes are now 2.55% and 2.78%, respectively, down 0.04% in the previous month.

They are still higher than their annualized equivalent rates as record lows of 1.99% and 2.25% were recorded in July 2020, although these numbers have been skewed by lenders who removed higher interest mortgages from the market. rates and low deposits during the pandemic.

For example, the typical two-year flat rate for a person with a 15 percent deposit was 2.49 percent in July 2019. It increased to 2.96 percent by June 2021, but has now fallen to 2.82 percent.

Read the latest news on mortgage rates

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