An apparent price war between the UK’s two biggest lenders represents “great news” for the stalled housing market, experts argue. Halifax and Abbey last week competed on two-year tracker deals sold through brokers, targeting homeowners with large amounts of equity.
David Doulton, director at Fairinvestment.co.uk, says the price wrangle marks the first instance where the two lenders have aggressively gone to war for new borrowers.
He described the battle as “great news… for those homeowners who have enough equity or a big enough deposit to be eligible for these deals”.
“Times are tough for British households, and mortgage lenders are in a position to ease the current conditions in the mortgage and property market,” he says.
“It is good to see that they are taking their responsibility seriously and helping to bring rates down. Hopefully more lenders will follow suit.”
Last week, Abbey launched a two-year tracker at 5.69% with a fee of £1,950 for homeowners who are remortgaging with at least 25% equity in their home.
Halifax countered with a deal at 5.59% – 0.1% below Abbey’s, or £12 a week less in monthly repayments on a £200,000 loan at £1,238.
Despite the apparent benefits of the price war, experts maintain first time buyers are still in an unenviable position.
Some argue the housing market stands no chance of real recovery if affordable lending for those looking to get on the property ladder for the first time continues to decline.
Filed under: Mortgage News, Mortgages | Tagged: mortgage rates
