Halifax increases rates despite Nationwide’s cuts – Mortgage Strategy

Halifax is increasing rates by up to 12 basis points, despite Nationwide announcing price cuts yesterday.

Brokers had expected the move by Nationwide to trigger reductions by other major lenders, so today’s news from Halifax came as a surprise.

A number of other lenders are repricing in both directions.

Halifax is raising first-time buyer and homemover rates by up to 12bps tomorrow, while remortgage rates and product transfer deals will climb by up to 5bps.

Accord Mortgages is cutting all 80% loan-to-value fixed rates in its buy-to-let range by 10bps on Thursday.

Virgin Money is reducing residential purchase and remortgage fixed rates by up to 8bps, while at the same time raising its buy-to-let rates for existing customers switching deals by up to 15bps.

Yesterday, Nationwide revealed it would be cutting prices by up to 19bps on a range of products from today in response to lower swap rates.

Gen H was also quick to respond to a drop in swap rates, cutting prices by up to 40bps, but so far none of the biggest high street names have followed.

Trinity Financial product and communications director Aaron Strutt says: “It is a surprising move from Halifax based on Nationwide’s announcement that it is lowering rates because of the drop in mortgage funding costs.

“It seemed like rates would be coming down rather than going up again, even if only by a small amount.

“Halifax is currently offering some of the cheapest two, three and five-year fixes so it must be getting lots of applications.”

John Charcol mortgage technical manager Nicholas Mendes says: “Lenders are constantly reviewing their position, weighing up funding costs, how much business they’re taking on, and how competitive they look against everyone else, and they don’t all reach the same conclusion at the same time, even when the backdrop is similar.

“Two-year swap rates, which lenders use to price fixed mortgages, have barely moved over the past day, ticking up slightly from 4.133% to 4.153%.

“That alone doesn’t explain why three lenders have gone three different ways today, which shows funding costs are only one piece of the puzzle.

“Virgin Money’s move is a useful example. Cutting rates for new borrowers while raising them for existing landlords switching deals isn’t a contradiction, it’s a lender managing its workload.

“If new business pricing gets too attractive, applications can come in faster than a lender can process them, so nudging up pricing elsewhere is a way of keeping things balanced without pulling back on the deals attracting new customers.”