Lenders across the UK have recently started lowering the cost of fixed-rate mortgages, despite the Bank of England choosing to keep its base interest rate unchanged last week.
Although the Bank Rate has remained steady at 4.25%, there’s been a gradual drop in swap rates — the interbank rates that heavily influence how lenders price their mortgage products. This shift hints at growing market confidence that interest rate cuts could be on the horizon in the months to come.
The next big date to watch will be 7 August, when the Bank of England meets again to decide whether to keep rates steady or make its first cut since rates began climbing. Many in the mortgage and housing sectors will be hoping for some relief, which could make borrowing cheaper for both homebuyers and those looking to remortgage.
Among the big lenders making changes is Halifax, part of Lloyds Banking Group. The bank has announced rate reductions across several products. Notably, its two-year fixed residential purchase mortgage at 60% loan-to-value (LTV) with a £999 fee has dropped from 4.01% to a more competitive 3.94%.
Halifax has also made adjustments to some of its remortgage options. For example, its 18-month fixed remortgage deal at 90% LTV has gone from 4.92% to 4.74%, although it comes with a £1,499 fee. Meanwhile, its three-year remortgage at 85% LTV is now priced at 4.39%, down from 4.55%, and includes a £999 fee.
Barclays is also stepping up, offering one of the most attractive rates currently available. The bank’s two-year fixed mortgage for buyers with a 60% LTV now stands at 3.89% with an £899 fee. For those who hold a Barclays Premier account, the rate dips even further to 3.88%.
For those looking to remortgage, Barclays has also lowered rates. Its two-year fixed remortgage deal now starts from 3.91% at 60% LTV, with a £999 product fee. These changes reflect Barclays’ efforts to remain competitive as summer approaches.
TSB has focused on helping first-time buyers and those purchasing homes through shared ownership or shared equity schemes. The lender now offers a two-year fixed rate at 4.64% for buyers with a 90% LTV, paired with a £995 fee, providing more choice to those entering the property market.
Virgin Money has made reductions too, cutting rates across selected residential and buy-to-let products offered through brokers. One notable option is its fee-free five-year residential purchase deal at 4.25% for borrowers with at least a 25% deposit, which equates to a 75% LTV.
Coventry Building Society has joined the wave of cuts. It now offers a two-year fixed residential purchase mortgage at 3.99% with a £999 fee at 60% LTV, and a five-year equivalent fixed rate at 4.14%. These reductions make their products more appealing to buyers seeking longer-term stability.
Skipton Building Society has reintroduced three-year residential purchase options and trimmed rates on other deals. Its two-year fixed remortgage rate now starts from 4.2% at 60% LTV, though this comes with a £1,495 fee. Such options could appeal to those looking to lock in savings for a shorter term.
Accord Mortgages, part of the Yorkshire Building Society, has made similar moves by cutting rates across two-, three-, and five-year fixed mortgage products offered through brokers. Buyers can now access a two-year fixed purchase mortgage from 4.07% with a £1,495 fee at 75% LTV, while the five-year fixed deal stands at 4.19%.
Specialist lender Gen H, which targets first-time buyers and self-employed professionals, has launched a new interest-only mortgage. This product is only available to borrowers with a household income of at least £50,000 and allows lending up to 80% LTV, providing another niche option in the market.
In the buy-to-let sector, BM Solutions, another part of Lloyds Banking Group, has dropped rates too. It now offers a five-year fixed remortgage for landlords at 4.06% with a £1,499 fee at 60% LTV. This move follows a report by Moneyfacts showing the number of available BTL mortgage deals has reached a record high of over 4,000 products.
Finally, Nick Mendes of broker John Charcol pointed out that two- and five-year swap rates have fallen sharply in the past month, explaining why lenders are racing to reduce rates. While the mortgage market remains competitive, lenders are not only lowering prices but also adjusting criteria and product features to attract borrowers.
Looking ahead, the Financial Conduct Authority (FCA) is consulting on possible reforms to the mortgage market. This consultation, open until 19 September 2025, aims to explore how lending could become more flexible and accessible, helping more people to buy and keep their homes.
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