Mortgage brokers have welcomed rate reductions from Halifax, but cautioned that “borrowers should not assume rates will continue on a downward trajectory” in the wake of US strikes on Iranian military installations over the weekend, which sent oil prices creeping upwards again on Monday morning. Late on Friday afternoon, Halifax announced it would be slashing its First-Time Buyer and Homemover fixed rates by up to 0.12% and remortgage fixed rates by up to 0.14%.

Gen H also unveiled a further round of rate reductions across its product range on Monday. Its five-year and two-year 60%–80% loan-to-value (LTV) rates will drop by 0.2% and 0.15% respectively from this evening. The lender’s New Build Boost rate will similarly be trimmed by 0.1%.

The reductions come as Nationwide figures reveal house prices declined by 0.6% last month, as the fallout from the Middle East crisis began to weigh heavily on consumer confidence and mortgage rates. Shaun Sturgess, director at Swansea-based Sturgess Mortgage Solutions, praised the cuts, but called on borrowers to remain vigilant rather than take any further reductions for granted.

He said: “When a lender like the Halifax cuts rates, other lenders take note. As we enter a new month, the hope is that rates continue to edge down, but escalating tensions between the US and Iran over the weekend are already sending the oil price higher, which has the potential to apply upward pressure on swap rates that determine fixed-rate mortgage pricing. Gen H announcing cuts on Monday is another positive, but borrowers should not assume rates will continue on a downward trajectory as markets remain volatile.”

Emma Jones, managing director of Runcorn-based Whenthebanksaysno.co.uk, echoed that sentiment: “Halifax announcing cuts on Friday and Gen H this morning gets June off to a good start, but in the current turbulent economic environment lenders can price in the other direction very quickly.”

Omer Mehmet, managing director of Welling-based Trinity Finance, also warned that any reductions could be swiftly reversed: “These cuts are a step in the right direction, but nothing can be taken for granted with markets so on edge and rate reductions can quickly be reversed. The lower rates that some borrowers are holding out for are by no means guaranteed.”

Justin Moy, managing director of Chelmsford-based EHF Mortgages, said: “It’s good to see further cuts from one of the major High Street lenders, as swap rates improve a little and confidence returns with mortgage providers. However, the ‘little and often’ approach creates havoc for both brokers and borrowers, so hopefully we will not see any changes smaller than 0.1% from Halifax or other high street lenders.”

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, cautioned borrowers against mistaking what they were seeing as a longer-term shift, warning they shouldn’t “mistake momentum for a trend”.

He continued: “Swap rates are still volatile and what’s available on Monday may not be there by Friday. If you’re sitting on the fence waiting for rates to fall further, you could easily miss the window. If the numbers stack up for you today, then you should act. Lock it in, and then keep one eye on the market.”

Charles Hart, business principal at Milton Keynes-based LionHart Mortgages and Protection, stressed that time was of the essence for borrowers navigating the current market climate: “We have repeatedly seen how fragile and short-lived these wins can be, so acting quickly to secure fresh reduced rates will be key.”

Nouran Moustafa, practice principal and IFA at Roxton Wealth, suggested the impact of the rate reductions would be modest given the prevailing mood of weak confidence and mounting costs: “Halifax cutting rates is good news, but let’s not pretend a 0.12% reduction suddenly fixes affordability. Borrowers are not sitting there thinking, ‘fantastic, my life has changed’.

“They are still dealing with higher monthly payments, tighter criteria, childcare costs, food prices and nervous household budgets. I do not think we are heading into some magical rate freefall. This feels more like careful competition than a market revolution.

“The borrowers who benefit most will be the ones who review early, understand their options and do not just chase the lowest headline rate. A small rate cut helps, but strategy matters more than excitement.”