Several major UK lenders have adjusted their mortgage offerings this week, with NatWest and Halifax reducing rates and Nationwide announcing changes that allow some buyers to borrow up to six times their income. Together, these moves are strengthening expectations of increased activity in the housing market as 2026 approaches.
According to figures from Uswitch, the average two-year fixed mortgage rate has edged up slightly to 4.49%. In contrast, the typical five-year fixed rate has dipped to 4.99%, down from 5%. These averages are based on mortgages with a 75% loan-to-value (LTV), meaning borrowers would need to provide a 25% deposit.
Last month, the Bank of England reduced the base rate from 4% to 3.75%, bringing borrowing costs to their lowest point in almost three years. While lenders have been cautious in passing on the full benefit of the cut, competition across the market is beginning to push rates lower.
Nationwide, the UK’s largest building society, has confirmed it will extend its higher loan-to-income lending beyond first-time buyers. The updated criteria now apply to existing customers who are moving home or remortgaging, with borrowing available up to 95% LTV.
Nicholas Mendes, mortgage technical manager at John Charcol, said expanding six-times-income lending beyond first-time buyers is a constructive move, particularly as earlier Helping Hand borrowers begin to review their next housing decisions. He added that the change supports borrowers who are limited by income multiples rather than monthly affordability and reflects how lenders are adapting to current market conditions.
NatWest has also made headlines this week by cutting mortgage rates, with one of the most competitive deals now available at 3.51% for a two-year fixed term. Halifax has followed suit, reducing the cost of both its two- and five-year fixed-rate mortgages.
Among other major lenders, HSBC continues to offer a two-year fixed mortgage at 3.66% with a £999 product fee for borrowers with a 60% LTV, unchanged from the previous week. Customers holding a Premier Standard account can access a slightly lower rate of 3.63%. Its five-year fixed option remains steady at 3.88%, also with a £999 fee.
For buyers with smaller deposits, HSBC offers 95% LTV mortgages, though at higher rates. Its two-year fixed deal stands at 4.79%, while the five-year equivalent is priced at 4.72%. The difference reflects the higher risk lenders associate with lower deposits.
HSBC has also introduced a cashback incentive of up to £2,000, aimed at easing the upfront costs of buying a home. Brokers suggest this could encourage further competition among high-street lenders, particularly as affordability pressures remain a concern despite recent rate reductions.
NatWest’s two-year fixed mortgage is now priced at 3.51% with a £1,495 fee, down from 3.57% last week. Its most competitive five-year fixed deal has also been reduced to 3.70%. Both products require a minimum deposit of 40%.
Barclays has kept its rates unchanged, offering a two-year fix at 3.57% with an £899 fee and a five-year fix at 3.79%. The bank has also launched new 95% LTV mortgages for buyers of new-build homes, reducing the deposit requirement from 10% to 5% on properties valued up to £600,000.
Earlier this year, Barclays introduced its Mortgage Boost scheme, which allows borrowers to increase their borrowing capacity by adding a family member or friend to the application. This can significantly raise the amount available without requiring a larger deposit or gifted funds.
Nationwide’s current two-year fixed rate for first-time buyers is set at 3.72%, with a five-year deal priced at 4.06%. Both require a 40% deposit and carry a £999 fee, with £500 cashback available on completion.
The building society’s latest changes mean home movers and remortgaging customers can now borrow up to six times their annual income, provided they meet minimum income thresholds of £75,000 for sole applicants or £100,000 for joint applications. Previously, borrowing was capped at 5.5 times income.
Halifax, the UK’s largest mortgage lender, now offers a two-year fixed rate of 3.72% at 60% LTV, slightly lower than last week. Its five-year fixed deal has also fallen to 3.88%, while a 10-year fixed option is available at 4.87%.
Santander recently withdrew some low-LTV products for first-time buyers following changes in swap rates after the Bank of England held interest rates. However, it continues to offer mortgages at 85% LTV and above, with two-year fixed rates starting from 4.06%.
At present, NatWest holds the most competitive rates on the market for both two- and five-year fixed deals, though access to these products requires a substantial 40% deposit. With the average UK house price standing at £297,755, this would equate to a deposit of around £120,000.
More broadly, an increasing number of borrowers are opting for mortgage terms of 35 years or longer, with some extending repayments into later life to manage affordability. Other lenders, including Skipton and Leeds Building Society, have also adjusted their criteria to help first-time buyers borrow higher income multiples.
While borrowers may welcome further interest rate cuts from the Bank of England, savers are likely hoping rates remain closer to current levels, highlighting the delicate balance policymakers continue to face.
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