Four banks cut mortgage rates in fresh price war

Better-than-expected inflation and a slowing property market ahead of the budget have prompted lenders to slash prices to drum up more business

George Nixon, Senior Money Reporter

Monday October 27 2025, 10.50am GMT, The Times

Four of Britain’s six biggest banks have cut their mortgage rates in a price war triggered by good news on inflation.

Santander cut fixed rates for homebuyers and those remortgaging by up to 0.36 percentage points today, while NatWest cut its deals by up to 0.21 percentage points. Barclays and HSBC made similar moves on Friday.

NatWest has the cheapest two-year fixed deal for buyers at 3.77 per cent, down from 3.94 per cent, available at up to 60 per cent loan-to-value (LTV), with a £1,495 fee.

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There has been a steady fall in swap rates — expectations of the future Bank of England base rate that banks use to price fixed-rate mortgage deals — over the past fortnight. Financial markets now expect the base rate, which is 4 per cent, to be cut more quickly than had been predicted.

Steady inflation data has boosted hopes of interest rates being cut as soon as November 6, the next meeting of the Bank’s monetary policy committee.

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The consumer price index measure of inflation released last week was 3.8 per cent in the year to September, the same as in the year to August but lower than the 4 per cent that had been expected by economists.

Food prices fell 0.2 per cent between August and September, the first monthly fall since May 2024, according to the Office for National Statistics.

Aaron Strutt from the mortgage broker Trinity Financial said: “We have been waiting for the lenders to start reducing their rates again for a while, especially as their funding costs have come down.

“Four big lenders announcing mortgage price cuts within days of each other clearly shows they want more business and we seem to have another mini price war as we start the run up to Christmas. The upcoming budget on November 26 is slowing down the mortgage and property markets pretty significantly and the banks are trying to incentivize borrowers to take their mortgages.”

Barclays cut its lowest two-year fixed rate for someone buying a home with up to 60 per cent LTV from 3.92 per cent to 3.86 per cent, with an £899 fee. HSBC’s lowest two-year fix for homebuyers, again at a maximum 60 per cent LTV, was cut from 3.9 per cent to 3.84 per cent, with a £999 fee.

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HSBC also cut its lowest two-year fix for someone remortgaging from 3.99 per cent to 3.92 per cent, with a £999 fee at up to 60 per cent LTV. The lowest rate for someone remortgaging is 3.86 per cent from NatWest, down from 3.9 per cent, with a £1,495 fee available at up to 60 per cent LTV. You can also get a five-year fix at 3.86 per cent from Halifax, available at up to 60 per cent LTV with a £1,499 fee.

Justin Moy from the mortgage broker EHF Mortgages said: “It’s a small reduction in rates, but it’s more about the change of direction. The fact we’ve had a rate cut for the first time in about four to six weeks is an important one for a borrower’s mood, and I think we’ll see more lenders make similar rate cuts.”

Cuts to remortgage rates are good news for about 950,000 homeowners whose fixed deals are due to end over the next six months, according to the Financial Conduct Authority, the City regulator.

Moy suggested homeowners should consider securing a new deal ahead of the budget, in case anything announced pushed up mortgage rates, such as a rise in government borrowing or gloomier forecasts by the Office for Budget Responsibility, the fiscal watchdog.

You can protect yourself from rises by reserving a rate with a new lender up to six months in advance. If rates get better in the meantime, you can still switch to a cheaper deal.

You could also reserve a product transfer with your lender three to six months before your deal ends. Nationwide Building Society said homeowners usually left it until the last month before their deal ended to secure a new one, but it is usually possible to act earlier.

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