Halifax Offers Lowest Ever Two Year Mortgage Rate | moneyfacts.co.uk

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Derin Clark

Derin Clark

Online Reporter
Published: 09/08/2021

The mortgage rate war continues today with Halifax slashing the rate on its two year fixed deal to just 0.83%, the lowest ever two year fixed deal on record.

The 0.83% deal is available directly and through mortgage brokers but only to those making a house purchase. The 0.83% rate is fixed until 30 November 2023, after which it reverts to 3.59%. Borrowers must have at least 40% equity or deposit in the property (60% loan-to-value) and a minimum of £250,000 must be borrowed through the mortgage loan. It charges £1,495 in product fees and comes with the incentive of £250 cashback for properties with an Energy Efficiency Band of A or B or a rating of 81 or higher.

Is the lowest rate the best deal?

Although this new rate from Halifax is highly tempting, those considering this deal should keep in mind that its high product fees means that there may be more cost-effective deals in the two year fixed charts. As such, it may be worthwhile speaking to a mortgage broker about whether it is the best deal for them before deciding to go ahead an choose this deal. For more information about how product fees can impact the cost of the mortgage, read our story on whether homeowners should switch mortgage deals.

Will mortgage rates continue to fall?

Mortgage borrowers with a high deposit or large amount of equity in their property will find a range of two year fixed deals offering sub-1% rates. Mortgage lenders will be keen to attract these borrowers as they are considered less risky than those with a lower deposit or equity in their home, which combined with the need to attract customers as the housing market starts to slow, has resulted in many large lenders reducing rates to attract borrowers. This could see more lenders reduce rates further, although with rates already at record lows it remains to be seen how low lenders will be willing to reduce rates.

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