Customers helped

Major UK banks announce big mortgage rate cuts

Updated 20 December 2023

2min read

Lisa-Marie Voneshen

Barclays, Halifax, Santander, TSB and NatWest have followed Nationwide’s lead in making significant cuts to mortgage rates, providing further hope for struggling existing and aspiring homeowners.

Earlier this month, Nationwide became the first major mortgage lender since the mini-budget last year to offer a two-year fixed rate deal of below 5% for those with a 40% deposit.  

As many brokers have predicted, other mortgage lenders have slashed their rates in response.   

Halifax recently announced mortgage rate reductions of up to 0.72 percentage points on select two and five-year products, while Barclays is cutting its rates for the second time in over a few days.  

Why have mortgage rates recently fallen? 

Mortgage rates are on a slow downward trajectory thanks to faster-than-expected falls in UK inflation and a likely peak in interest rates. This has led to speculation that the base rate could be cut in mid-2024.   

Swap rates have also been falling recently, which is based on anticipated interest rates in the future. This spells good news for struggling homeowners.  

As the housing market is under pressure due to high mortgage rates and with lenders trying to hit annual lending targets, they have been more open to rate cuts.  

Currently, the average two-year fixed mortgage rate for someone with a 40% deposit is around 4.9%, with rates potentially dropping to around 4% by the end of the year.  

While the outlook for existing and aspiring homeowners looks more positive, it’s more important than ever to get financial advice. 

It’s a good idea to start looking for a new mortgage up to six months before your deal ends.  

Unbiased can connect you with a mortgage broker so you can find the most competitive deal. 

Get financial advice
We’ll find a professional perfectly matched to your needs. Getting started is easy, fast and free.

About the author
Lisa-Marie Voneshen is a Senior Content Writer at Unbiased. She is an award-winning journalist with nearly a decade of experience writing and editing content across various areas, including personal finance and investing.