Halifax, the UK's largest mortgage lender, has launched a new market-leading remortgage deal, below 4%. The new 2-year fixed mortgage deal has a rate of just 3.79%. However this deal isn't available to everyone, plus for some people the arrangement fee might outweigh the savings made on the monthly mortgage repayments, as we explain in this article.
Halifax's new 3.79% fixed-rate mortgage
Key details:
- Mortgage rate: 3.79% fixed for two years, then the rate jumps to Halifax's Standard Variable Rate (SVR), currently 7.99%.
- Who is eligible? The deal is for remortgage customers only (switching from another lender to Halifax).
- Equity requirement: You'll need substantial equity, at least 40%, meaning the maximum loan-to-value (LTV) is 60%.
- Fee: The new deal has a £1,999 product fee, which is double the typical amount charged on many mortgages of this type.
- Minimum loan: The deal is available on loans between £250,000 and £2million.
Who qualifies for the deal (and who doesn't)?
To qualify for the new 3.79% Halifax deal you need to be remortgaging (switching from another lender to Halifax), have at least 40% equity in your home with a mortgage size of at least £250,000. First-time buyers and home movers are excluded as are those needing to borrow more than 60% of their property's value. Alternative deals are available for existing customers at slightly higher rates.
How does the Halifax 3.79% rate compare to other mortgage deals
While 3.79% is now the lowest 2-year fixed-rate mortgage available for those remortgaging, the £1,999 fee means it is not the cheapest deal when looking at the total cost over the 2-year fixed deal period, as shown in the table below. Indeed, Halifax itself offers an alternative deal with a headline rate of 4.05% and a lower fee of £999, which works out cheaper over the initial 2 years.
Comparison of leading 2-Year fixed remortgage deals
| Lender | Interest rate | Standard variable rate (SVR) after deal period ends | Lender's fee | Est. Monthly Payment^ | Est. total cost after 2 years^ |
| Halifax | 3.79% | 7.99% | £1,999 | £1,291 | £32,978 |
| HSBC | 3.84% | 6.74% | £999 | £1,297 | £32,141 |
| Barclays | 3.95% | 6.49% | £1,114 | £1,312 | £32,618 |
| Nationwide | 3.99% | 7.24% | £999 | £1,318 | £32,136 |
| Halifax | 4.05% | 7.99% | £999 | £1,326 | £32,835 |
^ Calculations based on a £250,000 loan over 25 years, with a 60% LTV
Is the £1,999 fee worth it?
Compared to alternative deals offering higher rates of between 3.84% and 3.99%, but with lower fees, you'd need to borrow around £255,000 or more on the new Halifax deal for the lower mortgage payments to save you money, over two years, once fees are factored in. The £1,999 fee means the new 3.79% Halifax deal only really becomes cost-effective for larger mortgages.
Is it still good news?
In reality, while the new 3.79% fixed-rate deal grabs headlines, which is perhaps its aim, it is only accessible to a specific, lower-risk group of people who are homeowners with lots of equity and large mortgages. However, it does show that mortgage rates are continuing to fall, reflecting the market's predictions for further cuts to the Bank of England base rate. This is good news for those looking to remortgage this year or buy a property.
How to get the best mortgage deal for you
If you are looking to remortgage or take out a mortgage to buy a property it is important to shop around, taking all fees into account and not just the headline interest rate. Bookmark our roundup of the Best mortgage deals in the UK. If you are a homeowner looking to remortgage then we also have a roundup of the Best remortgage deals in the UK.
Also bear in mind that some deals are only available via a mortgage broker. An independent mortgage broker can help you secure the best deal for your circumstances. If you don't know a mortgage adviser whose opinion you trust, then follow these simple steps to get a free mortgage review* from a vetted FCA-regulated mortgage professional:
- Click the link above
- Answer the four quick questions about your situation
- Enter your email etc
- Then select the "Review my Mortgage" button
Then an expert mortgage adviser will check if you are eligible to remortgage for free and with no obligation.
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