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Nationwide has recently reduced some of its mortgage rates, standing out from other leading lenders who have either maintained or increased their deals amid ongoing uncertainty over the future direction of interest rates.
According to new data from Uswitch, the average rate for a two-year fixed mortgage has remained stable at 4.75%, while the typical five-year fixed deal has stayed at 4.99%. These averages are based on 75% loan-to-value (LTV) products, meaning buyers are required to provide a 25% deposit.
This mixed movement in mortgage pricing follows the Bank of England’s decision to keep its base rate steady at 4% during its September meeting. The hold came as the Bank continues to assess whether inflation is falling fast enough to justify further rate cuts.
Inflation data released ahead of the Bank’s latest announcement revealed that the Consumer Prices Index (CPI) grew by 3.8% in the year to August, the same as in July. The lack of progress in reducing inflation has dampened hopes of additional rate cuts in the coming months.
Personal finance analyst Alice Haine from Bestinvest, part of Evelyn Partners, noted that although mortgage rates have eased compared to last year, the outlook for future reductions remains uncertain. “While rates have fallen following several Bank of England cuts, there’s still no guarantee we’ll see more reductions soon,” she explained.
Haine added that lending flexibility and the availability of low-deposit and longer-term mortgage options have made it easier for first-time buyers to pass affordability assessments. However, she warned that homeowners coming off ultra-low fixed rates still face steep increases in their repayments.
For those whose mortgage deals are ending soon, Haine suggested gradually increasing monthly payments in advance to help soften the blow of higher costs later. Doing so, she said, can reduce the outstanding balance and make the transition smoother on household finances.
Despite uncertainty about future rate cuts, activity in the mortgage market has shown cautious signs of recovery. Data from Stonebridge indicates that 64% of new fixed-rate mortgages this year have terms of three years or less, compared with 56% last year. Borrowers are increasingly favouring shorter terms to retain flexibility in an unpredictable economic environment.
Fixed-rate mortgages continue to dominate the market, representing more than 95% of total borrowing, as many homeowners prefer the stability of predictable payments. Remortgaging activity also remains strong, making up nearly 62% of all mortgage applications, an increase from 57% during the same period last year.
Rob Clifford, CEO of SimplyBiz Mortgages, described the rise in applications as “a clear sign of returning confidence”, even though the wider economy continues to present challenges.
Among the major lenders, HSBC is holding steady, offering a five-year fixed deal at 3.99% with a £999 fee, or 3.96% for Premier Standard account holders. Its two-year fix remains at 3.84%, also with a £999 fee. Both rates apply to 60% LTV deals, requiring a 40% deposit. HSBC also provides 95% LTV products, but with higher rates of 4.96% for a two-year fix and 4.87% for a five-year fix, reflecting the increased risk associated with smaller deposits.
NatWest has left its mortgage rates unchanged, with a five-year fixed deal at 4.02% and a two-year fix at 3.94%, both requiring a 40% deposit. Barclays has also maintained its current offerings, with a five-year fix at 4.11% and a two-year option at 3.92%, each with a product fee of £899.
Earlier this year, Barclays introduced its Mortgage Boost programme, which helps customers increase borrowing potential by adding a family member or friend to the application—without needing them to contribute a gift or deposit. This allows some buyers to stretch their budget and access homes they might not otherwise afford.
Nationwide, meanwhile, has reduced its two-year fixed rate for first-time buyers from 4.04% to 3.99%, while keeping its five-year fix at 4.27%. Both products require a 40% deposit and a £999 fee. The lender’s “Helping Hand” scheme remains a key feature, allowing eligible buyers to borrow up to six times their income, supporting affordability for those with stable earnings.
Other lenders have taken mixed approaches. Halifax increased its rates slightly, with a five-year fix now at 4.09%, up from 3.97%, and a two-year fix at 3.87%. Santander, on the other hand, has withdrawn some 60% LTV deals for first-time buyers borrowing under £250,000, adjusting its pricing in response to swap rate movements following the Bank of England’s recent decision.
Currently, HSBC offers the most competitive rates among the major lenders, leading with its 3.84% two-year and 3.99% five-year deals. However, both require a significant 40% deposit.
Across the market, more homeowners are turning to extended mortgage terms of 35 years or longer to reduce monthly payments, with some stretching repayment timelines into their 70s. Meanwhile, building societies like Skipton and Leeds have been easing income requirements and increasing borrowing limits to help first-time buyers get on the property ladder.
Despite the improvements, many households remain under financial strain after years of rising borrowing costs. With around 1.3 million fixed-rate mortgage deals due to expire this year, homeowners are hoping for further rate cuts, while savers may prefer that rates remain higher for now.
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