Halifax offers rate cuts on mortgage deals

Halifax is offering borrowers a reduction of 0.3 percentage points off their mortgage rate until the end of 2011 if they apply for a mortgage from the lender this month.

The lender will also give its current account customers a further reduction of 0.2 percentage points off their mortgage. This gives Halifax’s current account customers an overall reduction of 0.5 percentage points off their mortgage rate until the end of next year.

The deal, which runs from September 6 and October 3, is available across Halifax’s entire range of mortgage products and at all loan-to-values.

On Monday, Halifax also launched a new two-year tracker which is available to homemovers and first-time buyers. It comes at a pay rate of 2.49 per cent - bank base rate plus 1.99 per cent - until the end of 2011, followed by 2.79 per cent for the following year.

New and existing current account customers can access a lower rate of 2.29 per cent until the end of 2011, followed by a pay rate of 2.59 per cent. The two-year tracker deal is available up to 60 per cent loan-to-value and comes with a £1495 fee.

This comes as part of a growing trend by banks to offer cheaper mortgage deals exclusively to current account customers.

This month, Barclays became the latest lender to offer discounts on its mortgage products for its current account customers. From September 1, customers with any of Barclays current accounts, including Premier, Additions and Graduate accounts, will be offered discounts of up to 0.54 percentage points off selected mortgages.

Halifax’s latest deal builds on its “rewards range” for customers who pay £1,000 a month into a current account with the bank, launched at the start of this year. Current account customers have access to mortgage rates that are around 0.2 percentage points cheaper than rates offered to non-current account holders.

Melanie Bien of Private Finance, the mortgage broker, said borrowers should bear in mind that Halifax’s discounts last until the end of next year. “There will be another year to go after that on the higher rate so they need to work out the average of the two when comparing with other two-year trackers,” she said.

Bien said borrowers should not assume that these are the best products on the market or the most suitable for their particular circumstances. “We are going to see more of a push on these loyalty products by lenders so borrowers need to be on their guard and compare whatever they are offered with what else is available on the market,” she added.