NatWest (NWG.L) and Halifax have both cut mortgage rates this week, while Nationwide (NBS.L) will allow buyers to borrow up to six times their income, fuelling expectations of a “booming market” in 2026.
The average rate for a two-year fixed mortgage came in at 4.49% this week, a slight uptick according to data from Uswitch. The average five-year fixed deal came in at 4.99%, a drop from the previous 5%. Those are the average rates across all lenders for a 75% loan-to-value (LTV) mortgage, meaning buyers need to have at least 25% of the purchase price as a down payment.
The Bank of England cut interest rates to 3.75% from 4% last month, taking borrowing costs to their lowest level in almost three years.
The UK’s biggest building society will expand its lending from first-time buyers to both new and existing customers moving home or remortgaging, up to 95% LTV.
Nicholas Mendes, mortgage technical manager at John Charcol, said: “Nationwide extending six times income lending beyond first time buyers is a positive step, particularly as the first wave of Helping Hand customers starts to look at their next move, a remortgage, or additional borrowing.”
“It supports borrowers who are constrained by income multiples rather than the monthly cost, and it shows how lenders are adapting to the reality of today’s housing market. With the right advice, borrowers can use that flexibility to move sooner and secure a deal that fits both the immediate need and the longer-term plan.”
Read more: Half of UK homes increased in value in 2025 by an average of £9,900
Meanwhile, NatWest (NWG.L) has cut mortgage costs, now offering one of the cheapest rates on the market at 3.51% for a two-year fix. Halifax followed suit, also lowering costs on both its two- and five-year fixed deals.
Here’s more detail on major lenders’ mortgage rates this week:
HSBC (HSBA.L) has a 3.66% rate for a two-year deal, with a £999 booking fee, which remains unchanged from last week. For those with a premier standard account with the lender, this rate is 3.63%.
Looking at the five-year options, the fixed standard rate is 3.88% with a £999 fee, which is also unchanged.
Both cases assume a 60% LTV mortgage, meaning buyers need to have at least 40% for a deposit.
HSBC (HSBA.L) offers 95% LTV deals, meaning you only need to save for a 5% deposit. However, the rates are higher, with a two-year fix at 4.79% or a five-year fix at 4.72%.
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.
Read more: Interest rate cut hopes fade as inflation rises in December
The lender has recently unveiled a cashback offer of up to £2,000 in a bid to ease the upfront costs of entering the housing market.
The bank’s enhanced incentive package, which brokers say could ignite a fresh round of competitive pricing among high-street lenders, marks one of the most generous cashback schemes currently available. The measure is aimed at supporting borrowers struggling with deposit and moving costs at a time when affordability pressures remain high despite a recent easing in mortgage rates.
NatWest’s (NWG.L) two-year deal is 3.51% with a £1,495 product fee, which is a drop from last week’s 3.57%.
The cheapest five-year fixed deal available is now 3.70%, a drop from the previous rate of 3.74%. In both cases, you’ll need a deposit of at least 40% to qualify for the rates.
Barclays (BARC.L) has a two-year fix available at 3.57% with a £899 product fee, which is unchanged from last week. The five-year deal also remains unchanged, at 3.79%.
Barclays (BARC.L) has launched 95% loan-to-value (LTV) mortgages for purchasers of new-build houses, in a move aimed at easing the path to home ownership, especially for those entering the market for the first time.
Read more: Best credit card deals of the week
The offering applies to new build houses with a maximum purchase price of £600,000. Previously, buyers were required to pay a 10% deposit, meaning a £60,000 deposit on a £600,000 property. Under the new criteria, that requirement could be halved to £30,000.
Earlier in the year, Barclays (BARC.L) 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, Barclays (BARC.L) stated that an individual with a £37,500 annual income and a £30,000 deposit would be able to borrow up to £168,375, meaning the most they could afford would be a home worth £207,375.
However, with Mortgage Boost, the total borrowing potential can increase if a second person, such as a parent, is added to 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) has a two-year fix set to come in at 3.72% for first-time buyers. For a five-year deal, the rate comes in at 4.06%. Both deals require a 40% deposit and come with a £999 upfront fee.
First-time buyers also receive £500 cashback when they complete their mortgage with Nationwide (NBS.L).
The lender this week announced an expansion of its high loan-to-income (LTI) lending, a change that could see some borrowers access tens of thousands of pounds more than previously available.
Under the new terms, home movers and customers remortgaging will now be able to borrow up to six times their annual income. This enhanced offering extends to both new and existing customers moving home or remortgaging, applicable for loans up to 95% loan-to-value (LTV).
Read more: Nine UK property market predictions for 2026
To qualify for this increased borrowing, sole applicants must demonstrate a minimum annual income of £75,000, with joint applications requiring £100,000. These income thresholds remain consistent with previous requirements, which allowed eligible groups to borrow up to 5.5 times their income.
The changes mean that, for example, a sole applicant who was a new customer moving home or remortgaging, with an income of £75,000 may previously have been able to borrow up to £412,500 from Nationwide (NBS.L). But now they would potentially be able to borrow up to £450,000 – an increase of £37,500.
Halifax, the UK’s largest mortgage lender, offers a two-year fix at 3.72% (also 60% LTV), cheaper than last week’s 3.74%.
The lender, owned by Lloyds (LLOY.L), also offers a five-year rate of 3.88%, down from the previous 3.98%.
It has a 10-year deal with a mortgage rate of 4.87%.
Santander (BNC.L) withdrew its 60% LTV mortgage products for first-time buyers on borrowing of less than £250,000 on two- and five-year terms on 19 September.
A spokesperson for the bank said that the “change was part of a reprice following the changes to swaps after the Bank of England held interest rates”.
Read more: London homeowners most likely to sell at a loss
Santander (BNC.L) continues to offer products with LTVs of 85% and above for first-time buyers, with the cheapest two-year fix coming in at 4.06% or 4.19% for a five-year deal.
For home movers with a 40% deposit, Santander (BNC.L) is now offering a two-year fixed rate of 3.51% and a five-year deal of 3.72%, a drop from the previous 3.75% deal.
NatWest (NWG.L) offers offer the most competitive 2-year deal on the market for first-time buyers, with a fixed rate of 3.51% . When it comes to a five-year fixed deal, NatWest (NWG.L) also takes the crown, with its 3.70% offer. However, any of these deals require a hefty 40% deposit.
With the average UK house price coming at £297,755 in December, this means prospective homebuyers would need around £120,000 as a deposit to secure the cheapest rates.
A growing number of homeowners in the UK are opting for mortgage terms of 35 years or longer, with a significant rise in older borrowers stretching their repayment periods well into their 70s.
Skipton Building Society is allowing first-time buyers to borrow up to 5.5 times their income, helping more borrowers get on the housing ladder.
Leeds Building Society reduced the minimum household income requirement on its first-time-buyer mortgage range. This means single or joint first-time buyer applicants with a household income of £30,000 may now be able to borrow up to 5.5 times their earnings.
Mortgage holders and borrowers have faced higher repayments in recent years, as the BoE’s higher base rate has been passed on by banks and building societies.
Many homeowners will hope the Bank of England continues to cut interest rates. At the same time, savers will likely root for rates to remain at or near their current levels.
Read more:
Download the Yahoo Finance app, available for Apple and Android.
