Halifax has announced today that it has cut the rate it pays on its Help to Buy ISA from 4% to just 2.5%.

Those who already hold an account are still able to earn 4%, but could see a rate drop in the future.

The rate cut now means that at 4%, Santander is the provider offering the highest rate, closely follwed by Virgin Money on 3%.

Santander increased the interest rate on its Help to Buy ISA in March to match Halifax.

A spokesperson from Halifax said: “We regularly review our savings range and make changes in line with the market and our competitors.

“As the brand to offer a significantly higher rate of interest than its competitors when Help to Buy ISA launched in December 2015, we have seen unprecedented demand. This change maintains the rate for existing customers, and keeps Halifax within the top three rates when compared to its main competitors.”