Mortgage rates are dropping for the first time since the start of the US-Iran war. Many lenders initiated cuts last week, with Nationwide, NatWest, and Barclays joining in this week. In response, several other lenders have already rolled out a second round of cuts within a matter of days, offering welcome relief to thousands of borrowers.
However, the underlying factors that caused rates to surge in early March haven't completely disappeared. Additionally, this week’s inflation data revealed a three-year record high in fuel prices. Because of this, borrowers shouldn't assume that further rate cuts are guaranteed.
This week’s mortgage rate cuts
Nationwide, NatWest and Barclays are among the 'big six' lenders, so news that they have joined others in announcing cuts will be welcomed. Nationwide is the second-largest mortgage lender in the UK and the largest lender for first-time buyers.
The rate cuts come ahead of next week's Bank of England Monetary Policy Committee meeting, where the members will vote on the base interest rate. According to a recent Reuters poll of 62 economists, the short-term consensus is unanimous: all expect the central bank to hold the Bank Rate steady at 3.75% on 30th April. Looking further ahead, opinions on potential shifts are changing. Currently, 14 economists foresee at least one rate hike before the year ends, while 15 anticipate one or more cuts. This marks a notable shift from March, when fewer than 10% expected a hike and roughly a third were banking on a rate cut.
Latest mortgage rate cuts from lenders
- Nationwide has applied up to 0.25% reductions to many of its mortgage offers from 24th April, including its two-year fixed first-time buyer rate for a 60% LTV which has fallen from 4.90% to 4.66%, albeit with a £1,499 fee. Its lowest rate is 4.50%, which fell from 4.66% on a homemover mortgage on the same terms. Rate cuts have been applied to a range of LTVs and will help borrowers moving home or purchasing their first home.
- Similarly, NatWest has applied its first set of cuts to its mortgage products from 22nd April. Customers will find deals dropped by up to 0.37% across a five-year fixed range, with smaller cuts to the two-year fixes. It has also applied cuts to its tracker-rate remortgage offers which may be interesting to borrowers who wish to move to a variable rate in hopes that fixed rates fall further before they choose to lock in a fixed rate.
- Barclays reduced mortgage rates from 22nd April across a range of purchase and remortgage deals with up to 0.36% cuts. Its 60% loan-to-value purchase mortgage deal has fallen from 5.15% to 4.79% and is offered fee-free. With a £899 fee, the same deal fell from 4.95% to 4.60%, reflecting a similar saving. Deals across Barclays remortgage options fell by up to 0.25%.
- HSBC cut rates during the first wave of reductions last week and has announced further rate reductions this week. Rates have been reduced by up to 0.17% on 23rd April, following initial cuts of up to 0.33% on 17th April. The overall effect of the cuts means that many deals have seen significant rate reductions. For example, the two-year fixed mortgage rate for a homemover with a 40% deposit fell from 5.09% to 4.80% in the first cut and is now down to 4.65%, an overall reduction of 0.44%. HSBC has applied secondary cuts to homemover, first-time buyer and buy-to-let mortgages.
- Santander has done the same: it cut rates by up to 0.28% last week and has followed up with further cuts of up to 0.25%, effective from 24th April. It has focused mainly on borrowers with smaller deposits, with the majority of its more significant rate cuts being applied to first-time buyer deals up to 98% LTV, but smaller cuts can be seen across other mortgage deals too, including remortgage deals.
- Halifax cut rates by up to 0.35% last week and has followed these up with further cuts of up to 0.15% which came into effect on 24th April. Rate cuts will improve deals for homemovers, first-time buyers and buy-to-let customers.
- TSB Bank cut many mortgage rates by up to 0.45% on 17th April, but its rate cuts effective from 24th April are far more significant, with up to 0.80% slashed off some buy-to-let mortgage deals and up to 0.60% off three and five-year residential purchase and remortgage offers. It has also cut two-year tracker rates on either purchase or remortgage deals by up to 0.30%.
- Virgin Money, unlike most other lenders, increased the rates of many of its mortgage products last week by up to 0.25%, but has followed this up with reductions of up to 0.45% effective from 23rd April. The overall impact on its fixed-rate mortgage deals for purchase and remortgage customers is a marginal reduction in rates. Significantly, Virgin Money has not followed other lenders in cutting tracker rates - instead, it increased them by up to 0.25% this week.
Rate reductions were announced by other lenders too this week, including Skipton Building Society, First Direct, Principality Building Society and West Brom. You will find our regularly updated “Best Mortgage rates in the UK” article useful in sourcing which lenders are offering the best rates for your particular circumstances.
Are overall mortgage rates coming down?
The average two- and five-year mortgage rates rose from 4.83% and 4.95%, respectively, before the Middle East conflict, and hit peaks of 5.89% and 5.78% on 16th April. Two-year deals saw the biggest hikes with over a whole percentage point increase, making five-year deals cheaper as a consequence. These have since fallen to 5.82% and 5.72% in recent days. Amongst the many rate cut announcements, a small number of upward rate adjustments across some mortgage deals from a smaller number of lenders will have a contrary effect on the overall averages, so the overall average reduction remains significant.
Lenders apply rate cuts differently across various mortgage products, so it is worth checking the best rates available for your specific needs using our mortgage rate comparison tool, which compares thousands of deals from over 90 lenders across the mortgage market.
Will mortgage rates continue to fall?
When the recent rate cuts began, lenders explained that the March hikes weren't solely driven by events in the Middle East. They were also reacting to a sudden surge in mortgage applications. Many borrowers rushed to lock in rates amid uncertainty over the Middle East conflict, prompting lenders to raise rates to cool the overwhelming demand.
This current downward trend may only reflect a partial correction as lenders get on top of mortgage application volumes. Uncertainty in the Middle East remains high, and the effects of supply constraints caused by the conflict are still working their way down the chain to consumer pockets. Food inflation, in particular, is likely to increase over the coming months as speculation over the impact of fertiliser shortages grows.
You can follow our regular updates on the overall picture in our article, “Will interest rates continue to fall in 2026 or start going back up?”.
How borrowers can ensure they get the best deals and secure them quickly
Although the current swathe of mortgage rate cuts will paint a positive picture, borrowers can be left confused about when to act and how to ensure they have a deal that meets their needs, particularly if they are approaching the expiration of their current mortgage deal.
Whether you are buying a new property or remortgaging, you can usually lock in a deal now while keeping the option to switch if a better rate appears. You can start by using our mortgage rate comparison tool to filter the best deals from over 90 lenders. Keep in mind that these advertised rates are subject to strict qualifying criteria. Lenders will thoroughly assess your financial circumstances and credit history, meaning you will need to do a little research to find the lenders that match your affordability.
The benefits of a mortgage broker
To save time and avoid rejected applications, which can damage your credit score, it is highly recommended to use a mortgage broker. A broker can use their market expertise to quickly match you with the right lender. Crucially, they can also access exclusive "intermediary-only" deals that lenders do not offer directly to the public.
How to find a broker
- Local advice - Use the online financial directory Vouchedfor* to find brokers in your area, allowing you to select a professional based on customer reviews and their specific areas of expertise.
- Online advice - If you prefer to handle the process online, you can use the digital broker Habito*. Their independent advisers provide free mortgage advice and manage the entire process for you remotely.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, Vouchedfor
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