Mortgages: Halifax joins rivals in cutting rates on mortgages

Halifax is set to sharply cut rates on some of its fixed mortgage deals, potentially easing pressure on some homeowners.

The UK's biggest mortgage lender will reduce rates by up to 0.71 percentage points from Friday, with a five-year fixed deal priced at 5.39% from 6.10%.

Other lenders such as HSBC, Nationwide and TSB have cut some rates.

Mortgage rates have risen as the Bank of England has pushed up interest rates in a bid to tame soaring prices.

Rates will be cut by Halifax across a range of products on offer, with smaller cuts on two-year fixed deals and some aimed at first-time buyers.

Other big mortgage lenders have been cutting rates this week, with some experts suggesting it could be a sign that high inflation - which measures the rate of price rises - could be starting to ease off.

While inflation has slowed, at 7.9% it remains nearly four times higher than the Bank of England's 2% target.

The Bank of England lifted interest rates up for the 14th time in a row last week from 5% to 5.25%.

Higher interest rates means people have to pay more for their mortgages, for example, which means they have less money to spend on other things.

Among the rate reductions, HSBC has cut some homebuyer, first-time buyer and re-mortgage rates on offer by up to 0.35 percentage points, as well as adding a £500 cashback incentive to some deals.

Nationwide is also reducing the rates on offer for those re-mortgaging by up to 0.35% across two, three and five-year fixed deals.

While rate cuts might be welcome, if people are re-mortgaging or are moving onto a variable rate mortgage, their monthly payments are still likely to be much higher than the same time last year.

Aaron Strutt, from mortgage broker Trinity Financial said: "More of the larger banks and building societies are lowering their rates which is good news especially given the scale of rate increases we have seen in recent months."

"It would not be a surprise if more of them improve their rates over the coming weeks," he added. "Lenders are starting to realise the market is slowing down, and they need to improve pricing to attract more borrowers."