Lenders in the mortgage industry have begun the year with rate cuts, providing relief to homeowners and property investors seeking new deals.

The Halifax, the largest lender in the UK, has reduced interest rates by almost one percentage point, leading brokers to anticipate that other lenders will follow suit. HSBC has also announced plans to make cuts this week, as the market continues to evolve rapidly.

However, homeowners are being advised to carefully consider the terms of any offers they receive. Mortgage rates are expected to remain higher than in previous years due to significant changes in the market. Fixed mortgage rates remain constant until the end of the deal, typically after two or five years, at which point homeowners choose a new deal. Failing to do so would result in homeowners being charged a variable rate, which can be more expensive.

Over the next year, 1.6 million homeowners will see their current fixed-rate deals expire, potentially resulting in a significant increase in monthly repayments. However, the competitive mortgage market may alleviate some of the financial pressure. Halifax has reduced its rates, with interest on a two-year fixed deal being cut by up to 0.83 percentage points. HSBC will also reduce rates, with a two-year fixed rate for remortgages (for homeowners with at least 40% equity in their home) falling below 4.5% for the first time since June last year.