Halifax to offer five-year fixed mortgages at cheaper rates than two-year home loans


One of the UK’s biggest mortgage lenders will begin offering five and 10-year fixed rate mortgages at lower rates of interest than its two-year home loans, overturning borrowers’ expectations of mortgage pricing.

Halifax, which is part of Lloyds Banking Group, will from Monday offer a five or 10-year fixed rate deal at 2.48 per cent for those with a deposit of 40 per cent or more, compared with its two-year equivalent of 2.54 per cent, all with a fee of ÂŁ999.

For those with a lower deposit of 25 per cent, the two-year rate is 2.59 per cent, compared with 2.58 per cent for the five or 10-year deal.

Mortgage borrowers have historically paid more for the security of a five or seven-year fix, which gives them confidence that their monthly repayment costs will not jump unexpectedly in the short term.

But rates on two, five, seven and 10-year fixes have narrowed sharply in recent months, as the cost of short-term funding for lenders has risen and…

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