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5mo ago

UK Mortgage Rates Drop Below 4% as Major Lenders Intensify Competition

Halifax, NatWest, and Nationwide announce rate cuts, with affordability measures expanding borrowing capacity for homebuyers.

The UK's biggest mortgage lender, Halifax, is among those cutting rates (georgeclerk/ Getty)
Many of the lowest rates are available to those buying a home rather than remortgaging, a broker said
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Overview

  • Five of the UK’s six largest mortgage lenders now offer fixed-rate home loans below 4%, following reductions by Halifax, NatWest, and Nationwide.
  • Halifax and NatWest cut two-year fixed rates to 3.94% for borrowers with a 40% deposit, while Nationwide offers the lowest rate at 3.89% starting Wednesday.
  • HSBC UK and First Direct have reduced stress-test thresholds, enabling more borrowers to qualify for mortgages and access larger loan amounts.
  • Remortgage rates remain higher, with the lowest two-year fix at 3.98% from Yorkshire Building Society, highlighting a disparity with purchase rates.
  • Rate cuts are driven by lower inflation, global economic uncertainty from Trump’s tariffs, and expectations of further Bank of England rate reductions in 2025.