Following HSBC's announcement of a sub-4% agreement, Halifax lowers mortgage rates

After HSBC started selling residential mortgages with interest rates as low as 4% on Wednesday, Halifax, a subsidiary of Lloyds, lowered its rates.

Halifax stated on Thursday that a number of its three-year fixed packages will have cheaper remortgage rates, up to 0.32 percentage points. These offers are scheduled to go live on Friday.

Subsequently, rival TSB Banking Group reduced the interest rates on several of its two-year fixed residential and remortgage agreements by as much as 0.55 percentage points.

Following the bank's announcement on Wednesday of interest rates as low as 3.94% on remortgages, HSBC had sparked rumours that lenders would begin slashing mortgage rates widely.

Perkins noted that cutbacks "should get more and more explosive as we move through the rounds" and described the market as "pent-up."

According to Moneyfacts, the average rate for a two-year fixed mortgage was 5.92% as of Wednesday; the rate for a five-year contract was 5.53%.

This follows the summer rate hikes by lenders brought on by the Bank of England's frequent increases in base interest.

With the latest mortgage rate drops coinciding with expectations building of a Bank of England base interest rate reduction in the next months, speculation has increased recently that rises have peaked as inflation appears to have been brought under control.

(Sources: investing.com, proactiveinvestors.co.uk, moneyfactsgroup.co.uk)