Property Assistant UK

Bank Of England Records Increased Approvals

Bank Of England Records Increased Approvals

Halifax, the UK’s biggest mortgage lender, has cut selected two and five-year fixed rates for home purchase, remortgage and product transfer by up to 0.11 percentage points, writes Jo Thornhill.

It follows other major lenders, including Santander and HSBC, in tweaking rates downwards for new and existing customers, following more positive news on inflation and interest rates last month.

While Halifax reduced rates for purchase yesterday, the rate cut for selected remortgage deals will be effective from tomorrow (3 April).

Two and five-year fixed rate deals for product transfer (deals for existing customers looking to switch to a new rate) and deals for further advance (existing customers wanting to borrow more) will also be cut by up to 0.11 percentage points from tomorrow.

The lender’s two-year fixed rate for home purchase is now at 4.63% with a £999 fee, for borrowers with at least 40% deposit (60% loan to value). The equivalent five-year rate starts from 4.39% (also 60% LTV).

BM Solutions, the specialist lender which is also part of the Halifax Bank of Scotland group, has also reduced selected fixed rates across most of its ranges. The new rates and deals will be available from tomorrow (5 April).

The Bank of England’s latest Money and Credit Report is showing green shoots for the housing and mortgage market with net mortgage approvals for house purchase up by more than 4,000 to a total of 60,400 in February (this is up from 56,100 in January).

Net approvals for remortgage (borrowers switching to a new deal with a different lender) also increased, from 30,900 to 37,700 during the same period.

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell by 0.29 percentage points, according to the Bank, to 4.90% in February.

Gareth Lewis, managing director at property lender MT Finance, said: “These are positive, encouraging figures from the Bank of England. More people are looking to borrow, and it’s a good sign when house purchase numbers are moving in the right direction. Buyers are comfortable that the interest rate environment is settled.

“With remortgaging to another lender increasing, it is a further sign that the interest rate environment is moving in the right direction as more borrowers are looking at their options, rather than taking the easier route of a product transfer (with the same lender).”

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