Halifax finally launch cheap Bank of England base rate tracker mortgages without early repayment charges
Halifax for Intermediaries has finally launched a range of Bank of England base rate tracker mortgages without early repayment charges.
While many other banks and building societies, like HSBC and Santander, have offered flexible variable-rate mortgages for a while, Halifax has not, apart from its expensive standard variable rate. This lack of flexibility has been a real issue, particularly for Halifax's existing borrowers coming to the end of their deals.
Why would you need a tracker rate?
A tracker mortgage can offer more attractive terms if you plan to sell your home or make a lump sum overpayment or remortgage. They often provide an alternative to being locked into a fixed rate.
Unlike fixed-rate mortgages, where you know exactly what your monthly repayments will be, tracker mortgages are less predictable, as your monthly repayments can go up and down. However, they are a good option for those needing a flexible mortgage, maybe because they want to move or wait to see if fixed rates get cheaper before they are tied into a longer-term fix.
With lenders like HSBC predicting the Bank of England base rate to be closer to 3.25% over the next 18 months, tracker rates may increase in popularity.
Are Halifax's new tracker mortgages worth taking?
Halifax offers a range of Bank of England tracker rates suitable for those looking for flexible mortgages. Its rates are more competitively priced than some of the other big banks.
Halifax's lowest variable mortgage tracks the base rate with a margin of 0.08% over the current 5% base rate for those with a 40% deposit. This rises to 0.15% over the base rate if you have a 25% deposit and 0.54% over base if you have a 10% deposit.
Aaron Strutt, product director at Trinity Financial, says: "If you opt for a tracker mortgage, it is well worth taking one without early repayment changes or with the option to switch to a fixed rate at any point without paying additional fees. Most borrowers take two—or five-year fixes without considering whether a tracker or offset mortgage would be more appropriate."
What are Halifax's arrangement fees?
The arrangement fee is £1,499 for Halifax's mortgages between £75,000 and £1 million, rising to £3,999 for mortgages between £1,000,001 and £5 million.
Is anyone taking tracker rate mortgages?
Recent data from wealth management firm Quilter shows the number of tracker mortgages taken out over the past three years jumped by 67% even as interest rates rose.
The number of tracker mortgages taken, which offer interest rates that follow the Bank of England base rate often without early repayment charges, lifted from 118,818 loans in 2021 to 198,044 by the first quarter of this year.
Call Trinity Financial on 020 7016 0790 to secure a Bank of England tracker mortgage, book a consultation, or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
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