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Antony Antoniou – Luxury Property Expert

Mortgage Rates Drop Below 5% as Lenders Slash Rates

Mortgage Rates Drop Below 5% as Lenders Slash Rates

Mortgage lenders in the UK are cutting rates aggressively in response to declining inflation. Halifax has become the latest major lender to reduce fixed rates, sparking predictions that sub-4% mortgages could return before the end of 2023.

Halifax Slashes Rates In Latest Move

On Wednesday November 15th, Halifax announced significant reductions to its fixed rate mortgages. The lender is now offering a 5-year fixed rate at 4.53% with a £999 fee for loans up to 60% LTV. It has also launched a 2-year fixed rate at 4.97% with a £999 fee for the same 60% LTV tier.

The cuts from the UK’s biggest mortgage lender put further pressure on competitors to follow suit. Brokers have welcomed the announcement as providing momentum to the market after a sluggish period.

Gary Bush, director at broker, said: “All we need now is for some more competitive rates in the 90% and 95% LTV brackets and it will create a much-needed boost to the end of 2023 and the start of 2024.”

Market Expects Further Cuts Before Year End

Experts are predicting that mortgage rates could fall below the 4% mark by the end of 2023 if inflation keeps dropping.

Ashley Thomas, director at broker Magni Finance, commented: “I wouldn’t be surprised to see rates drop below 4% by the end of the year. The next inflation data will be crucial for mortgage lenders, and expect a lot of rates to reduce if inflation has dropped significantly.”

Lewis Shaw, director at Shaw Financial Services, added: “Halifax stepping into the fray once again and dropping rates close to the 4.5% mark will certainly put the cat amongst the pigeons. Hopefully, this adds some momentum to the market and will trigger other lenders to sharpen their pencils or risk losing out.”

Scramble For Business Before Christmas

Brokers believe lenders are scrapping it out to snap up the last bits of business before the Christmas slowdown. The recent spate of rate cuts from major lenders like HSBC and Halifax indicate a competitive marketplace.

Darryl Dhoffer, director at The Mortgage Expert, commented: “It’s now crystal clear that lenders are scrapping it out for the last bits of business as we head into the Christmas break. Long may this continue. Let’s hope we start 2024 with the same levels of appetite from lenders.”

The aggressive rate reductions suggest lenders feel positive about inflation coming down. They want to gain market share before their rivals.

Remortgaging Market Still Challenging

While purchase rates have fallen significantly, the remortgaging market remains challenging. Borrowers rolling off low fixed rates are facing much higher new deals.

Craig Fish, director at Lodestone Mortgages & Protection, said: “It’s such a shame that there is no focus on helping those who are looking to remortgage, which is where the real help is needed right now.”

Ranald Mitchell, director at Charwin Private Clients agreed: “Some comparatively strong rates are on offer for those looking to buy, move or who have large loans. However, Halifax’s remortgage rates have, disappointingly, remained unchanged. With so many people coming to the end of ultra-low rates, I would expect Halifax to be ready and competing to be the least bad option for people considering a remortgage.”

Hopes For a Boost To Housing Market

Some brokers feel these latest rate cuts could provide a boost to the wider property market if the momentum continues into 2024.

Imran Hussain, director at Harmony Financial Services, said: “With Halifax dropping rates hot on the heels of HSBC, this could send shockwaves through the lending market and hopefully inject some much-needed momentum into the property market.”

Kirsty Wells, director at Blueprint Mortgages & Protection, added: “I’m already getting excited for the new year with hopefully continued lower interest rates. I expect to see many more lenders follow suit as the big boys like HSBC and Halifax have both made announcements this week. Keep them coming.”

The reductions may tempt buyers back after political and economic uncertainty dampened the market this year. More competitive rates in higher LTV tiers would be welcomed.


In summary, Halifax has sparked hopes of a return to sub-4% mortgage rates with its latest round of reductions. The market expects further cuts if inflation keeps falling. Lenders seem to be battling for business before Christmas after positive signs on inflation. However, the remortgaging market remains challenging and more support is needed for borrowers rolling off low rates. There are hopes these cuts could boost housing market activity in 2024 if the momentum continues into the new year.

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