Leeds Building Society and HSBC’s decision to start the year with a reduction in mortgage rates across its product range is a welcome move for the housing market.

Both lenders have announced mortgage rate cuts on several of its products. For existing customers, Leeds Building Society has cut fixed residential interest rates by up to 0.24%, and selected interest-only rates will drop by up to 0.15%.

The reductions follow closely after Halifax, which lowered rates by up to 0.35% for those remortgaging in early 2025. It is widely expected that the moves by the lenders could be the catalyst for other lenders to follow suit.

Justin Moy, managing director at EHF Mortgages, told the press: “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 mortgage 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.”

Last month, the Bank of England opted to hold interest rates at 4.75%, although several cuts are expected this year.

Bank of England multiple interest rate cuts expected in major boost for mortgage borrowers