Major mortgage lenders across the UK are now offering deals below the 4% threshold, bringing some relief to borrowers. This shift comes amid growing competition among providers following the Bank of England’s recent interest rate cut.
According to data from Uswitch, the average two-year fixed mortgage rate has fallen to 4.79%, down from 4.99% the previous week. Similarly, five-year fixed rates now average 5.04%, compared to 5.24% a week earlier.
The Bank of England has reduced its base rate from 4.5% to 4.25%. This change means homeowners on tracker mortgages will see a decrease in their monthly repayments—UK Finance estimates this saving to be around £28.97 per month, or nearly £350 annually, based on typical outstanding balances.
For those on standard variable rate (SVR) mortgages, the potential monthly saving is slightly lower at approximately £13.87, assuming lenders fully pass on the rate reduction. Over the course of a year, this could total savings close to £170.
Inflation appears to be easing as well. The Consumer Price Index (CPI) recorded a 2.6% rise in the 12 months to March 2025, marking the slowest rate of increase since December. This figure is edging closer to the Bank of England’s 2% inflation target.
Several lenders have responded quickly to the rate change. Santander and Barclays have both introduced mortgage products priced under 4%. Nationwide has also made adjustments, lowering its affordability stress rates to make borrowing easier for applicants.
In parallel with these developments, the Financial Conduct Authority (FCA) has announced plans to simplify mortgage lending regulations. The proposed changes would allow lenders to skip formal advice or full affordability assessments for many customers, aiming to make the process quicker and more cost-effective.
Meanwhile, Skipton Building Society has launched a new offering called the Delayed Start Mortgage. This option gives first-time buyers the chance to delay their mortgage repayments for three months, providing a financial buffer to help with the upfront costs of moving home.
The number of mortgaged homeowners facing repossession rose sharply in the first quarter of this year, with figures showing an increase of nearly 20% compared to the previous three months.
UK Finance reported that 1,220 homeowner repossessions were recorded during this period, reflecting an 18% rise from the final quarter of 2024.
Buy-to-let properties also saw a rise in repossessions, with 810 cases recorded in the first quarter, marking a 16% increase on the previous quarter.
Despite this upward trend, UK Finance emphasised that overall repossession levels remain relatively low when viewed over a longer timeline.
In fact, the total of 2,030 repossessions involving homeowners and buy-to-let landlords in early 2025 is far below the 13,200 repossessions recorded in the first quarter of 2009, at the height of the global financial crisis.
The report also highlighted that most current repossessions involve older mortgage agreements, with over two-thirds relating to loans taken out at least ten years ago.
HSBC mortgage deals
HSBC (HSBA.L) continues to offer a five-year mortgage deal at a rate of 3.93%, which remains the same as the previous week. Customers holding a Premier Standard account with HSBC can access a slightly lower rate of 3.90%.
For two-year fixed-rate mortgages, the lowest available rate stands at 3.91% with a £999 arrangement fee, also unchanged from before.
These rates apply to mortgages with a 60% loan-to-value (LTV), meaning buyers need to have saved at least 40% of the property’s value as a deposit.
HSBC also provides mortgage deals with a 95% LTV, which requires only a 5% deposit. However, these come with higher interest rates, such as 4.99% for a two-year fixed term or 4.94% for five years.
The rate a borrower can secure depends heavily on their financial circumstances and the size of their deposit. Generally, the bigger the deposit and the lower the LTV, the more favourable the mortgage deal, as lenders view these applicants as less risky.
NatWest mortgage deals
NatWest (NWG.L) continues to offer a five-year fixed mortgage deal at a rate of 3.88%, accompanied by a £1,495 arrangement fee. This remains unchanged from the previous week.
Similarly, the lowest rate available for a two-year fixed deal is also 3.88%, with no adjustments from last week’s figures.
To qualify for these rates, borrowers must have a deposit of at least 40% of the property’s value in both cases.
Santander mortgage deals
At Santander (BNC.L), the five-year fixed mortgage rate for first-time buyers has dropped to 3.99%, down from the previous 4.10%. This deal comes with a £999 fee and assumes a 40% deposit.
For those looking for a shorter term, the two-year fixed rate is now 3.89%, also with a £999 fee. This is a reduction from the earlier rate of 3.94%.
Santander has additionally launched mortgage products specifically designed for first-time buyers needing larger loans. These include two- and five-year fixed-rate deals at 60% loan-to-value (LTV), but with a higher product fee of £1,999.
Barclays mortgage deals
Barclays (BARC.L) was the first major lender to reintroduce mortgage deals below 4%, and it has recently lowered these rates again. The five-year fixed rate now stands at 3.89%, down from last week’s 3.93%. For “Premier” clients, the rate drops slightly further to 3.88%.
For two-year fixed deals, the lowest available rate is now 3.87%, reduced from the previous 3.92%.
Barclays has also introduced a new mortgage product called Mortgage Boost, designed to help new and existing customers access larger loans when buying a home. This scheme allows family members or friends to effectively increase the amount that can be borrowed without directly lending money, gifting funds, or requiring a bigger deposit.
With Mortgage Boost, a borrower’s eligibility can increase significantly by adding a family member or friend to the application. For example, a borrower earning £37,500 annually with a £30,000 deposit might usually be able to borrow up to £168,375, allowing them to buy a home priced at about £198,375. However, if a second applicant—such as a parent—earning the same amount joins the application, the combined income could increase borrowing capacity to £270,000, enabling the purchase of a property worth up to £300,000.
Nationwide mortgage deals
Nationwide (NBS.L) currently offers its lowest mortgage rate at 3.84%, which is available to both new and existing customers who are looking to move to a new property. This rate applies to both the two-year and five-year fixed rate products.
For the first time since September 2024, Nationwide has introduced sub-4% mortgage rates specifically for first-time buyers. The lowest rate for first-time buyers is 3.94% on a two-year fixed rate product at 60% loan-to-value (LTV), with a £1,499 fee. There is also a 3.99% option available on the same 60% LTV, two-year fixed rate product, but with a reduced fee of £999.
First-time buyers considering a five-year fixed deal are currently looking at a rate of 4.09%.
Carlo Pileggi, Nationwide’s senior manager for mortgages, stated: “We’re pleased to announce our third rate cut in three weeks as we aim to remain one of the most competitive lenders in the market. This latest update includes sub-four percent rates for first-time buyers, along with reduced rates across our Helping Hand mortgages. These mortgages allow eligible first-time buyers to borrow up to six times their income with up to 95% loan-to-value.”
The lender has also adjusted its mortgage affordability calculations by lowering its stress rates by between 0.75 and 1.25 percentage points. This change will enable applicants to borrow more, whether they are purchasing their first home, moving, or remortgaging.
On average, borrowers can now access approximately £28,000 more than before. In some remortgage cases, customers could potentially borrow up to £42,600 extra.
Nationwide has reduced both its standard stress rate and the rate applied to eligible first-time buyers and home movers who choose to fix their mortgage for at least five years.
Halifax mortgage deals
Halifax, the UK’s largest mortgage lender, currently offers a five-year fixed rate of 3.93% at 60% loan-to-value (LTV), which remains the same as the previous week.
For first-time buyers, the lender, which is owned by Lloyds (LLOY.L), provides a two-year fixed rate deal of 3.87% with a £999 fee, also unchanged from last week.
Additionally, Halifax offers a 10-year fixed mortgage rate of 4.78%.
The lender has recently improved its five-year fixed mortgage products by increasing the amount borrowers can access. This change allows borrowers to secure up to £38,000 more, enabling larger mortgages based on individual income levels.
Rachel Springall, a finance expert at Moneyfacts, commented: “The growing availability of low-deposit mortgages will certainly be welcomed by those looking to remortgage or buy their first home.
She added, “The government has made it clear that it wants lenders to support UK growth, so an increase in product options for aspiring homeowners is a positive move forward.”
Cheapest mortgage deal on the market
In the midst of a mini price war between mortgage providers, prospective homebuyers are now seeing some improved options. NatWest (NWG.L) currently offers the cheapest five-year fixed deal at 3.88%, while Halifax and Barclays lead the way for two-year fixes at 3.87%. However, both deals require a deposit of 40%.
Given that the average UK house price stands at £297,781, a 40% deposit would mean saving roughly £120,000.
There is also a noticeable increase in the number of homeowners choosing mortgage terms of 35 years or longer. This trend is especially apparent among older borrowers who are extending their repayments into their 70s.
One lender, April Mortgages, allows buyers to borrow up to six times their income on fixed loans ranging from five to 15 years, with deposits starting as low as 5%. These mortgages are available to both individual buyers and those purchasing with others. As part of the independent Dutch asset manager DMFCO, April Mortgages offers interest rates beginning at 5.20%, alongside a £195 application fee.
Skipton Building Society has announced plans to support first-time buyers by letting them borrow up to 5.5 times their income, aiming to help more people get onto the property ladder.
Similarly, Leeds Building Society has raised the maximum borrowing multiple for first-time buyers with a new mortgage range. Now, aspiring homeowners with a household income of at least £40,000 could borrow up to 5.5 times their earnings.
Mortgage holders have faced record-high repayments in recent years due to banks and building societies passing on the Bank of England’s rising base rates.
According to UK Finance, around 1.3 million fixed mortgage deals are set to end in 2025. Many homeowners will be hoping the Bank of England takes swift action to cut rates more significantly, while savers will likely prefer rates to stay at or near current levels.
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