Lenders slash mortgage interest by up to 0.35% in start of ‘mini-rate war’

Leeds Building Society and Halifax have announced a raft of rate cuts in “great news” for homeowners heading into the new year.

For existing customers, Leeds Building Society has cut fixed residential by up to 0.24%, and selected Interest Only rates will drop by up to 0.15%.

New customers can also benefit, with Residential and Reach fixed rates decreasing by up to 0.21% and Interest Only rates by up to 0.15%.

The reductions follow closely after Halifax’s recent cuts, which lowered rates by up to 0.35% for those remortgaging in early 2025.

Justin Moy, managing director at said: “Early moves by Halifax and Leeds Building Society on New Year’s Eve suggest a mini rate war will rage at the start of January, which can only be great news for borrowers.

“With huge numbers of borrowers looking for a new deal on their in 2025, it will be important to reserve deals whilst rates are favourable, and January will be an ideal time to take advantage. Other lenders will follow in the coming days without doubt.”

David Stirling, independent financial advisor at said: “Halifax follow closely on the heels of Leeds Building Society, as both look to start the eagerly anticipated 2025 rate race ahead.

“The New Year should see lots of competition between the lenders, as they try and take as much market share as possible before the April Stamp Duty changes, when things are likely to dampen in the world. This is great news for borrowers looking to buy or coming off fixed rates in the early part of the year, as rates could drop lower than they have been for while.”

Elliott Culley, director at added: “With 2025 upon us, it’s not surprising to see lenders want to start it off with a bang.

“Lenders will have targets they need to hit and will want to hit the ground running. Remortgages will be a big part of 2025 so it’s likely we will see lenders putting more emphasis into this for 2025.”

According to data from Moneyfactscompare, the current average two-year fixed residential rate stands at 5.48%, while the average five-year fixed rate is 5.25%.

Market analysts predict rates are , especially in January, a time when lenders typically offer competitive rates to attract new business.

However, they caution that the market remains “volatile and uncertain,” emphasising the importance of careful planning. to read the six key predictions for 2025.