Halifax's new 1.5 year mortgage term has been welcomes by those looking for shorter fixed rate products. Reducing its shortest fixed rate remortgage term by six months will help those who want the security of a fix, without being tied into a longer deal - particularly with lower rates expected in the medium-term.

Halifax’s new product rates start at 4.37% and all include £250 cashback.

Examples of the new product include:

  • Maximum of 60% loan-to-value (LTV), with a rate of 4.37% and a fee of £1,499 for loans between £25,000 and £2m.
  • Maximum of 85% LTV, with a rate of 5.25% and a fee of £1,499 for loans between £25,000 and £2m.
  • Maximum of 90% LTV, with a rate of 5.63% and a fee of £1,499 for loans between £25,000 and £750,000.

 

Halifax Intermediaries & Scottish Widows bank head Amanda Bryden says: "Brokers have told us that their clients are keen to see more shorter-term products. With this latest launch, we’re delivering the certainty of fixed payments balanced with a term that offers more flexibility.”

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The reaction has been cautiously positive. Jack Tutton,  director at SJ  Mortgages says:

"This is an intriguing innovation from Halifax and it will be interesting to see how well it is received.

"With the forecasted base rate reductions for next year, we have seen a rise in the number of people looking for shorter fixed rate products. They are not always comfortable with the risks involved with some variable alternatives that may offer the flexibility to review your mortgage in the short term."

Iain Swatton, Director at Exemplar Financial Services adds: "Halifax’s 1.5-year fixed rate seems like a savvy play for borrowers betting on future rate cuts without committing to a long-term fix. By skipping free legals, Halifax appears to be weeding out speculative applications, but the cashback offer softens the blow for genuine borrowers. It's a calculated move that offers flexibility and shows Halifax is tuned into market sentiment. The question now is whether borrowers are ready to buy into this short-term strategy."

Harps Garcha, Director at Brooklyns Financial considers what's leading the decision - and why it is an 18-month, rather than one year deal, saying: "Innovative step forward by Halifax. What’s particularly puzzling is the absence of 1-year fixed rate options. Are they anticipating something on the horizon that we mere mortal brokers aren’t privy to? It raises questions about whether this move reflects deeper market insight or if it’s simply a reaction to current market demands."