Halifax has reduced some of its mortgage rates this week, while many other major lenders have either held their rates steady or raised them.
According to Uswitch, the average two-year fixed mortgage now sits at 4.81%, while the average five-year fixed deal is 5.03%. These figures are based on a 75% loan-to-value (LTV) mortgage, meaning borrowers must have at least a 25% deposit.
This flurry of mortgage moves comes shortly after the Bank of England (BoE) decided to maintain interest rates at 4%, a decision that disappointed many homeowners and prospective buyers across the UK.
Santander recently withdrew its two-year fixed-rate 60% LTV mortgage for first-time buyers borrowing under £250,000. A spokesperson explained this repricing followed changes to swaps after the BoE announcement. Products for higher LTVs of 85% or above are still available.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, highlighted that recent rate cuts since last summer and a more relaxed lending environment have made mortgages slightly more affordable for some borrowers.
However, Haine added that the BoE holding rates steady, combined with uncertainty about future cuts, could unsettle homeowners, especially those on large mortgages with ultra-low fixed rates that are now expiring.
Borrowers coming off old deals may face significantly higher repayments, prompting the need for careful budgeting and swift action to lock in new rates. Haine advises not to wait for borrowing conditions to improve, as mortgage rates have been volatile in recent weeks.
HSBC currently offers a five-year fixed rate at 4.04% with a £999 fee, unchanged from last week. Premier Standard account holders receive a slightly lower rate of 4.01%. The two-year fixed rate is 3.89%, also unchanged. Higher LTV deals, such as 95%, carry considerably higher rates.
NatWest’s five-year fix has increased to 4.02% with a £1,495 fee, up from 3.94%. Its cheapest two-year fix now stands at 3.94%, up from 3.88%. Both deals require a 40% deposit.
Barclays has kept its five-year fixed rate at 4.11% (£899 fee) and two-year fix at 3.92% (£899 fee). The bank also introduced Mortgage Boost, a scheme that allows family members or friends to be added to a mortgage application to increase borrowing capacity without requiring direct gifts.
Nationwide’s lowest five-year fix for first-time buyers is now 4.27%, up from 4.22%, while the two-year fix is 4.04%, up from 3.99%. Both deals require a 40% deposit and a £999 fee. Its Helping Hand programme enables eligible buyers to borrow up to six times their income, supporting around 60,000 first-time buyers since 2021.
Halifax now offers the lowest rates among major lenders, with a five-year fix at 3.97% and a two-year fix at 3.82%, both for 60% LTV with £999 fees. On the average UK house price of £271,079, a 40% deposit equates to over £108,000.
Longer mortgage terms, including 35-year deals, are becoming more popular. Many older borrowers are extending repayments well into their 70s, as they navigate rising costs and tighter lending criteria.
Skipton Building Society has allowed first-time buyers to borrow up to 5.5 times their income, and Leeds Building Society has introduced similar lending multiples, making it easier for aspiring homeowners with a minimum household income of £30,000 to get on the property ladder.
Overall, mortgage holders in the UK face record-high repayments following the BoE’s higher base rate. With 1.3 million fixed-rate deals set to end in 2025, many homeowners hope for more aggressive rate cuts, while savers will likely prefer rates to remain at current levels. Borrowers need to act quickly if their fixed-rate mortgage is ending, to secure the best available deals.
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