NatWest and Halifax have raised their mortgage rates following the Bank of England’s decision to keep interest rates unchanged.
Although the central bank held the base rate steady at 3.75%, several lenders moved ahead with increases to their mortgage pricing. NatWest and Halifax became the latest major banks to adjust their deals upwards, continuing a trend that began before the Bank’s announcement.
Figures from Uswitch show that the average two-year fixed mortgage rate now stands at 4.53%, the same level as last week. Meanwhile, the typical five-year fixed deal has edged down slightly to 4.94%, compared with 4.98% the previous week. These averages apply to mortgages with a 75% loan-to-value ratio, meaning buyers need to provide a deposit of at least 25% of the property’s purchase price.
Despite the base rate remaining unchanged, lenders appear to be pricing in ongoing uncertainty around inflation and future interest rate movements. This has led many providers to act cautiously by adjusting their mortgage products ahead of time.
Rising borrowing costs are emerging alongside an increase in the number of homes being repossessed. Data from the banking and finance industry shows that 5,160 mortgaged properties were repossessed last year. This represents a 39% rise compared with 2024, when 3,710 repossessions were recorded.
However, the industry body noted that repossession levels are still well below long-term historical averages. For comparison, more than 44,000 homeowners lost their properties in 2009 during the global financial crisis.
In the final quarter of 2025 alone, 1,210 repossessions were reported. This was 17% higher than in the same quarter a year earlier, although it was 13% lower than the previous quarter, suggesting some stabilisation towards the end of the year.
Mortgage arrears figures offer a more positive picture. During the fourth quarter of 2025, around 80,490 homeowner mortgages were in arrears by 2.5% or more of the outstanding balance. This was 4% lower than the previous quarter and 13% lower than the same period in the previous year, indicating that fewer households are falling seriously behind on their payments.
Looking at individual lenders, HSBC has left its mortgage rates unchanged this week. The bank is offering a two-year fixed deal at 3.76% with a £999 booking fee for customers with a 60% loan-to-value mortgage. Those with a Premier Standard account can access a slightly lower rate of 3.73%.
For five-year fixed mortgages, HSBC’s standard rate is currently 3.88%, also with a £999 fee and based on a 60% loan-to-value ratio. This means borrowers need to provide a deposit of at least 40% of the property value.
HSBC also continues to offer high loan-to-value products for buyers with smaller deposits. Customers putting down just 5% can access a two-year fixed rate of 4.74% or a five-year fixed rate of 4.79. These higher rates reflect the increased risk lenders associate with smaller deposits.
Mortgage pricing varies depending on a borrower’s financial profile and the size of their deposit. Generally, the larger the deposit and the lower the loan-to-value ratio, the more competitive the interest rate available. Lenders view these borrowers as less risky, allowing them to offer better deals.
Overall, the mortgage market remains sensitive to movements in interest rates and wider economic conditions. While the Bank of England has paused further increases for now, many lenders are continuing to adjust their products in response to uncertainty about inflation and household affordability.
With repossessions rising but arrears falling, the picture remains mixed. Borrowers are facing higher costs, yet many households appear to be managing their repayments more effectively than during previous downturns.
As the year progresses, attention will remain focused on how long the base rate stays on hold and whether lenders begin to pass on lower mortgage costs should confidence in the economy improve.
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