All but one of the UK’s biggest mortgage lenders now offer at least one home loan below 4 per cent after Halifax and NatWest cut rates on Tuesday (22 April) and Nationwide announced cuts from Wednesday (23 April).
Brokers say that now could be the time for those coming to the end of their mortgage deal to lock in a new fixed rate.
The cheapest deals on the market are only available to those with large deposits or equity in their home – equivalent to 40 per cent of their property value – and on two-year fixed rates rather than five-year deals.
However, lenders are currently cutting rates across the full range of products.
Halifax, Britain’s biggest mortgage lender, cut rates by 0.19 percentage points on Tuesday, and it now has a two-year fixed deal for those moving home with a 40 per cent deposit, priced at 3.94 per cent with a £999 fee.
NatWest also cut rates and has a two-year deal at 3.94 per cent, though with a hefty £1,495 fee, while Nationwide will cut rates from Wednesday, including introducing a 3.89 per cent deal with a £1,499 fee.
HSBC is now the only lender left of the so-called ‘big six’ that is not offering any deals below 4 per cent.
Rates for those remortgaging, rather than buying a new home, are generally higher, with a two-year deal at 3.98 per cent from Yorkshire Building Society the cheapest option on the market.
Five-year deals are also pricier. There are no deals of this length below 4 per cent, with the cheapest on the market a 4 per cent rate from NatWest.
Nick Mendes of John Charcol brokers said he predicted further cuts were coming.
“I expect we will see HSBC reprice in the next fortnight,” he said.
Other experts said that rate cuts were relatively slow so far.
Andrew Montlake of Coreco said: “Whilst we are now seeing lenders actively cutting rates and returning to the sub-4 per cent level, they are not dramatic cuts and slow and steady still seems to be the order of the day.
“The days of all-out rate war may follow in time, but at the moment, lenders seem to be engaged in more local skirmishes.”
Aaron Strutt of Trinity Financial said lenders were trying to attract business after the stamp duty hikes at the start of the month, which was why the cuts were more dramatic for those buying properties rather than existing owners looking to remortgage.
“We are seeing remortgage cuts too, but that’s a captive market, so the lenders can charge a little bit more. With the new buyer market, you sometimes need to try and attract those borrowers,” he said.
Banks have been able to reduce their prices after a combination of Donald Trump’s tariff plans – which are set to dampen the economy – and lower-than-expected inflation figures, which have raised the prospect of multiple Bank of England rate cuts in 2025.
Financial markets now expect between three and four interest rate cuts in 2025, with the next one only weeks away.
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