If you’ve been sitting on the fence about remortgaging, the market might finally be nudging you off it.
A fresh wave of lenders has trimmed their fixed-rate deals this week, with several high street names cutting rates by anywhere between 0.1 and 0.3 percentage points. It’s not a dramatic slash, but in a market where every fraction of a percent translates to hundreds of pounds a year, it matters.
Nationwide, Halifax, and a handful of smaller building societies are among those who’ve moved, responding to continued falls in swap rates, the behind-the-scenes borrowing costs that largely dictate what lenders can afford to offer. When swap rates ease, lenders tend to follow, and right now the direction of travel is encouraging.
“We’re seeing genuine competition return to the mortgage market,” one senior broker told industry publication Mortgage Solutions this week. “Lenders are fighting for business again, and that’s good news for borrowers.”
For context, the average two-year fixed rate has edged down to around 5.3%, compared with the eye-watering 6.85% peak seen in mid-2023. That’s still considerably higher than the sub-2% deals that seemed almost normal just four years ago, but the trajectory is pointing the right way.
First-time buyers stand to benefit particularly. Affordability checks have been punishing for anyone trying to get on the ladder over the past two years, and even modest rate reductions can make the difference between passing or failing a lender’s stress test.
Those coming off fixed deals struck before rates spiked are in a tougher spot, facing a significant jump regardless. But with lenders competing more aggressively for their business, shopping around is more worthwhile than it’s been in some time. A good mortgage broker can often find deals that don’t appear on comparison sites at all.
The Bank of England’s base rate currently sits at 4.25%, and markets are pricing in at least two further cuts before the end of 2025. If those cuts materialise, lenders will almost certainly respond with further reductions of their own.
The question now is whether this momentum holds, or whether economic uncertainty puts the brakes on just as borrowers were starting to breathe again.
