Almost all major lenders have brought back under-4% deals this week, offering some respite for borrowers in an apparent response to the financial turmoil sparked by the US trade tariffs that changed expectations on UK interest rates.
The average rate for a two-year fixed mortgage stands at 5.14%, while five-year fixed deals average 5.31%, according to data from Uswitch.
The Bank of England held its interest rate at 4.5% last month after warning that global economic uncertainty has "intensified". This is the lowest level for rates in more than 18 months, following a reduction from 4.75% in February, the third such cut since August 2024.
Financial markets and economists predict that the Bank of England will reduce borrowing costs more than expected this year to avoid a downturn.
The primary inflation measure, the Consumer Price Index (CPI), stood at 2.6% in the 12 months to March 2025, a slight decrease from the previous month. That means that prices have been rising at the slowest pace since December and are closer to the BoE's 2% target.
Most economists are predicting that the main borrowing rate will be cut on 8 May from its current 4.5% to 4.25%.
This week, NatWest (NWG.L) cut its interest rates across its mortgage products and is now offering 3.94% for a two-year fix. Halifax has also entered the under-4% space with its own 3.94% deal .
Read more: Mortgage rates rising despite Bank of England interest rate cuts
At Nationwide (NBS.L), those with a 40% deposit can get a 4.09% rate on a two-year fix, with a £1,499 fee, or a 4.14% rate with a £999 fee.
Henry Jordan, of Nationwide, said: 'We know that rate is an important factor for borrowers looking to buy their first home or move onto their next.
"These latest cuts should put Nationwide firmly on the radar for first-time buyers and home movers as we continue to be one of the most competitively priced lenders in the market."
Barclays (BARC.L) was the first major lender to enter the sub-4% fixed-rate market last week. HSBC (HSBA.L) and Santander (BNC.L) are yet to cross this threshold for first-time buyers.
HSBC (HSBA.L) has a 4.12% rate for a five-year deal, unchanged from the previous week. For those with a Premier Standard account with the lender, this rate is 4.07%.
Looking at the two-year options, the lowest rate is 4.10% with a £999 fee, also unchanged from the previous week.
Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit.
HSBC offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are much higher, with a two-year fix coming in at 5.29% or 5.07% for a five-year fix.
This is because their financial situation and deposit size determine the rate someone can get. The larger the deposit, the lower the LTV, allowing buyers to access better deals because lenders consider them less risky.
NatWest (NWG.L) has a five-year deal coming in at 4% with a £1,495 fee, lower than the previous 4.13%.
The cheapest two-year fix deal is 3.94%, also lower than the previous 4.14%. In both cases, you'll need at least a 40% deposit to qualify for the rates.
At Santander (BNC.L), a five-year fix is 4.16%, unchanged from the previous week. It has a £999 fee, assuming a 40% deposit.
For a two-year deal, customers can also secure a 4.01% offer, with the same £999 fee, which is lower than last week’s 4.08%.
Read more: Bank of England poised to cut interest rates in May
Santander has also introduced mortgage products tailored to first-time buyers with large loans. These feature two- and five-year fixed-rate deals at 60% LTV, albeit with a higher £1,999 product fee.
Barclays (BARC.L) has brought back its under 4% deals, with a five-year fix at the lender now at 3.99%, unchanged from the previous wee. For "premier" clients, this rate drops to 3.98%.
The lowest you can get for two-year mortgage deals is 3.99%, also untouched from the previous week.
Barclays has launched a mortgage proposition to help new and existing customers access larger loans when purchasing a home. The initiative, known as Mortgage Boost, enables family members or friends to effectively "boost" the amount that can be borrowed toward a property without needing to lend or gift money directly or provide a larger deposit.
Under the scheme, a borrower’s eligibility for a mortgage can increase significantly by including a family member or friend on the application. For example, an individual with a £37,500 annual income and a £30,000 deposit might traditionally be able to borrow up to £168,375, enabling them to purchase a home priced at around £198,375.
However, with Mortgage Boost, the total borrowing potential can rise substantially if a second person — such as a parent — joins the application. In this case, if the second applicant also earns £37,500 a year, the combined income could push the borrowing limit to £270,000, enabling the buyer to afford a home worth up to £300,000.
Nationwide (NBS.L) offers a five-year fix at 4.14%, with a £999 fee and a 40% deposit. This is lower than last week's 4.49%.
Nationwide offers a two-year fixed rate for home purchase at 4.09% with a £999 fee — also for borrowers with a 40% deposit. This is also lower than the previous 4.34%.
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The lender has announced it is changing the eligibility criteria for its mortgage scheme, which allows people to borrow up to six times their income.
The minimum income required to take out a Helping Hand mortgage has been reduced to £35,000 — meaning more people will be eligible for the scheme. The minimum income requirement for joint applications will remain at £55,000.
Helping Hand mortgages enable people to borrow up to six times their income, meaning potential homeowners can borrow 33% more compared to Nationwide’s standard lending at 4.5 times income.
Halifax, the UK’s biggest mortgage lender, offers a five-year rate of 4.1% (also 60% LTV), lower than the previous 4.17%.
The lender, owned by Lloyds (LLOY.L), offers a two-year fixed rate deal at 3.94%, with a £999 fee for first-time buyers, which is also lower than last week's 4.06%.
It also offers a 10-year deal with a mortgage rate of 4.78%.
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The lender has enhanced its five-year fixed mortgage products by increasing borrowing capacity. This improvement allows borrowers to access up to £38,000 more, enabling them to secure larger mortgages based on individual incomes.
Rachel Springall, finance expert at Moneyfacts, said: "The flourishing choice of low-deposit mortgages will no doubt be welcomed by borrowers who are either looking to remortgage or are a first-time buyer.
"The government has been clear that it wants lenders to do more to boost UK growth, and so a rise in product availability for aspiring homeowners is a healthy step in the right direction."
With the recent adjustments, sub-4% mortgage deals are making their way back to major lenders. Barclays' 3.99%% is currently the cheapest deal for both five-year while NatWest's 3.94% is the lowest for two-year fixes among the top banks, though both require a 40% deposit.
The average UK house price is £366,189, so a 40% deposit equates to about £147,000.
A growing number of homeowners in the UK are opting for 35-year or longer mortgage terms, with a significant rise in older borrowers stretching their repayment periods well into their 70s.
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Lender April Mortgages offers buyers the chance to borrow up to six times their income on loans fixed for five to 15 years, from a deposit of 5%. Both buying alone and those buying with others can apply for the mortgage.
As part of the independent Dutch asset manager DMFCO, the company offers interest rates starting at 5.20% and an application fee of £195.
Skipton Building Society has also said it would allow first-time buyers to borrow up to 5.5 times their income to help more borrowers get on the housing ladder.
Leeds Building Society is increasing the maximum amount that first-time buyers can potentially borrow as a multiple of their earnings with the launch of a new mortgage range. Aspiring homeowners with a minimum household income of £40,000 may now be able to borrow up to 5.5 times their earnings.
Mortgage holders and borrowers have faced record-high repayments in recent years, as the Bank of England's base rate has been passed on by banks and building societies.
According to UK Finance, 1.3 million fixed mortgage deals are set to end in 2025. Many homeowners will hope the Bank of England acts quickly to cut rates more aggressively. At the same time, savers will likely root for rates to remain at or near their current levels.
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