Halifax has become the latest major mortgage lender to cut rates on its two-, five- and 10-year residential fixes by as much as 71 basis points.  

The county’s largest home loans business says its reductions cover first-time buyer, new build, large loans and shared equity products, which will come to market on Friday (11 August).  

Highlights among the range include:  

• A five-year purchase repayment and interest-only deal, with a £999 fee, at 60% loan to value, at 5.28%, down by 71bps  
• A two-year purchase repayment-only offer, with a £999 fee, at 80% LTV, at 6.18%, reduced by 27bps  
• And a 10-year purchase repayment and interest-only loan, with a £999 fee, at 75 LTV, at 5.14%, cut by 10bps  

The move follows the Bank of England’s base rate rise by 25bps to 5.25% last week, its 14th consecutive rise taking it to the highest level for 15 years.        

The central bank is battling inflation, which dropped to 7.9% in the year to June from 8.7%, but still remain almost four times higher than its 2% target.      

However, lenders say swap rates have fallen from their early July peak, allowing them to cut rates. Nationwide, HSBC and TSB are among other major lenders to cut rates this week.  

Speaking to news agency Newspage R3 Mortgages founder and director Riz Malik says: “With Halifax, the UK’s largest residential lender, adjusting its prices downwards alongside HSBC and TSB, it signals to the market that even following a base rate increase, fixed rates can drop.   

“In that regard, the mortgage market has become almost surreal. I expect other major high-street lenders to cut rates in a similar fashion by the end of the week.   

“Such repricing will be beneficial to thousands of households looking to renegotiate their mortgage between now and the end of the year.”  

Altura Mortgage Finance managing director Rob Gill adds: “The forecast following last month’s below-expected inflation figure was that mortgage rate cuts would follow two to three weeks after and we’re now seeing that prediction come true.   

“All eyes will now be on next week’s inflation figure, due on 16 August. If this confirms a further fall in inflation, a mortgage price war in September cannot be ruled out as lenders seek to make up for a quiet July and August.”