Despite the Bank of England’s recent decision to cut interest rates, many lenders have opted to keep their mortgage rates steady. However, first-time buyers could still secure deals as low as 3.77%, depending on their deposit size, with NatWest retaining its competitive two-year fixed rate option.
Current figures from Uswitch reveal that the average two-year fixed mortgage rate sits at 4.70%, while the average for a five-year fixed deal is slightly higher at 4.97%. These rates offer opportunities for borrowers, especially with new regulatory changes set to make the mortgage process simpler.
The Financial Conduct Authority (FCA) has confirmed updates to its rules aimed at making remortgaging and shortening loan terms easier for homeowners. In addition, the Bank of England has relaxed lending restrictions, allowing a greater proportion of mortgages to be issued at higher loan-to-income ratios. Previously capped at just under 10% of new mortgages, this limit has now increased to 15% across the market, with some lenders permitted to exceed this further.
The BoE estimates this could lead to around 36,000 additional mortgages being issued each year at higher loan-to-income levels, opening the door for more buyers to step onto or move up the property ladder.
Data from Rightmove shows that the average two-year fixed rate at 80% loan-to-value (LTV) has dropped significantly over the past year, from 5.21% to 4.38%. Similarly, the average five-year fixed rate at the same LTV has fallen from 4.91% to 4.52%, further improving affordability for many buyers.
First-time buyers still face higher hurdles in certain parts of the country, with London, St Albans, and Cambridge topping the list of the most expensive locations. Average asking prices in these cities stand at £497,295, £387,882, and £361,709 respectively.
Matt Smith, mortgage expert at Rightmove, noted that this marks the third Bank Rate cut of the year, aligning with the Bank’s predicted path. While lenders have already had room to reduce rates recently due to global economic factors, this latest cut could prompt further—albeit modest—reductions.
He added that competition among lenders remains intense, with many vying for business in a housing market that currently boasts the largest number of properties for sale in a decade. The combination of rate adjustments and more flexible lending criteria is enabling buyers to borrow more responsibly, increasing their chances of securing the home they want.
Market analysts predict at least one more Bank Rate cut before the end of the year, with the possibility of two. Any further reductions would likely encourage another round of small rate drops from lenders, stimulating more activity in the property market during the second half of the year.
In another positive move for affordability, Nationwide, the UK’s largest building society, has lowered the minimum salary requirement for first-time buyers from £35,000 to £30,000, a change expected to help an additional 10,000 people become homeowners.
Amanda Bryden, head of mortgages at Halifax, acknowledged that challenges remain for those hoping to move onto or up the property ladder. However, she emphasised that falling mortgage rates, coupled with rising wages, are gradually improving affordability.
She also highlighted that the new, more flexible lending assessments are supporting market resilience, helping to maintain steady activity despite broader economic uncertainty.
HSBC Mortgage Offers
HSBC is currently offering a five-year fixed mortgage at a rate of 3.94%, the same as last week. Customers with a Premier Standard account can secure a slightly lower rate of 3.91%.
For those considering a two-year fixed term, the lender’s lowest rate is now 3.78% with a £999 fee, reduced from 3.82% the previous week.
These figures are based on a 60% loan-to-value (LTV) mortgage, which means buyers must provide a deposit covering at least 40% of the property price.
HSBC also provides 95% LTV mortgages, allowing buyers to get on the ladder with just a 5% deposit. However, these come with higher rates — 4.94% for a two-year fix and 4.79% for a five-year fix. This difference is due to the higher perceived risk to the lender, with larger deposits generally giving access to more competitive deals.
NatWest Mortgage Offers
NatWest’s five-year fixed mortgage remains at 3.88% with a £1,495 fee, unchanged from last week.
Its most affordable two-year fixed deal is still 3.77%, also requiring a 40% deposit to access.
Santander Mortgage Offers
Santander’s five-year fixed deal for first-time buyers is 4.01% with a £999 fee, based on a 40% deposit. This rate has remained steady.
For a two-year fix, borrowers can access a 3.84% rate with the same £999 fee.
However, Santander has raised some rates on five-year fixed deals with 85%-95% LTV by up to 0.12%.
Barclays Mortgage Offers
Barclays’ current five-year fixed rate stands at 3.99%, holding steady from last week.
The lowest two-year fixed rate, which used to be 3.76% (or 3.75% for Premier customers), is now 3.84% for standard clients and 3.83% for Premier customers.
The bank has recently introduced “Mortgage Boost,” a scheme designed to help buyers access larger loans without needing a bigger deposit or direct financial help from family or friends.
Under the initiative, borrowers can include a relative or friend on their application to increase their borrowing potential. For example, someone earning £37,500 with a £30,000 deposit might normally borrow up to £168,375, allowing them to purchase a property worth around £198,375.
With Mortgage Boost, if a second applicant also earns £37,500, the combined income could increase the borrowing limit to £270,000, enabling the purchase of a property worth up to £300,000.
Nationwide Mortgage Offers
Nationwide’s lowest rate for first-time buyers is 4.14% for a five-year fixed term. For a two-year fix, the rate is 3.94%, with both options requiring a 40% deposit and carrying a £1,499 fee.
From 1 September 2025, customers on Nationwide’s Standard Mortgage Rate will see a reduction of 0.25%, bringing it down to 6.74%. Rates on tracker mortgages will also automatically fall to reflect the Bank of England’s rate cut.
Carlo Pileggi, Nationwide’s senior mortgage manager, explained that the lender’s latest cuts bring more of its deals below the 4% threshold, aiming to attract first-time buyers, movers, and those seeking a new deal.
The society has also lowered the minimum income requirement for first-time buyers from £35,000 to £30,000 for single applicants, and from £55,000 to £50,000 for joint applicants. This change is expected to help around 10,000 more people become homeowners each year.
Nationwide, which supported more first-time buyers than any other lender in 2024, has also applied to the Prudential Regulation Authority to raise its capacity for high loan-to-income (LTI) lending.
Much of this lending is through its “Helping Hand” scheme, which allows eligible first-time buyers to borrow up to six times their income — around 33% more than traditional lending rules allow. Since its launch in 2021, Helping Hand has assisted approximately 60,000 first-time buyers in securing a home.
Halifax mortgage deals
Halifax, the UK’s largest mortgage lender, is currently offering a five-year fixed rate of 3.94% at 60% LTV, unchanged from last week. First-time buyers can also access a two-year fix at 3.79% with a £999 fee, while a 10-year option is available at 4.78%.
The lender, owned by Lloyds, has recently boosted its five-year fixed products by increasing the amount borrowers can access by up to £38,000, making it easier for customers to secure higher-value loans.
According to Moneyfacts finance expert Rachel Springall, the growing availability of low-deposit products will be welcomed by both first-time buyers and those remortgaging. She noted that government pressure on lenders to help drive UK growth is encouraging more competitive deals for aspiring homeowners.
Lowest mortgage deals
NatWest is leading with some of the most competitive rates, offering a two-year fix at 3.77% and a five-year fix at 3.88%—both requiring a 40% deposit. With the average UK house price at £298,237 in July (Halifax), this means buyers would need around £120,000 upfront to qualify.
Meanwhile, more UK homeowners are opting for longer mortgage terms of 35 years or more, with many older borrowers extending repayments well into their 70s.
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