UK mortgage rates are a key concern right now with outside influences such as Trump’s tariff war playing a role, but there have been some positive shifts.
Speculation has been rife as to what impact the recent US tariff turmoil could have on the UK mortgage market, with many predicting mortgage rates could fall along with inflation, while others have reported a rise due to financial instability.
However, recent UK mortgage news has revealed a few positive trends in the sector in the residential and buy-to-let mortgage space, across mainstream as well as more specialised segments of the market.
Boost in sub-4% mortgage rates
Over the past couple of weeks, while average UK mortgage rates remain closer to 5% and the Bank of England base rate hovers unchanged at 4.5%, more lenders have entered the fold with products on sub-4% interest rates to entice borrowers. The trend among the big lenders was started by Barclays, which cut the rate on some of its fixed term deals to 3.99% earlier this month.
This week, both Halifax and Nationwide have followed suit with new market-leading sub-4% deals. This includes both two-year and five-year fixed rates, with products on offer for first-time buyers and home movers alike, and for new borrowers as well as those looking to remortgage.
Other lenders that are also offering mortgage rates at less than 4% include Santander, NatWest, Coventry Building Society, and Yorkshire Building Society.
Switch between two-year and five-year rates
For the past couple of years, average five-year mortgage rates have been cheaper than their two-year equivalent, but the tables have begun to turn according to recent reports. According to Rightmove, the average two-year deal on 60% loan to value (LTV) is now 4.18%, while the five-year fixed rate equivalent comes in at an average of 4.19%.
The difference may be small, but it shows a changing trend within the mortgage market as lenders move back towards bringing in more short-term deal customers rather than enticing them to take on longer rates.
This could have been exacerbated by the global tariff situation in recent weeks, and the property portal believes this could be a growing trend across the mass market, with an expected base rate cut in May potentially giving lenders more room to slash mortgage rates.
Commenting on the research, Toby Leek, NAEA Propertymark president, said: “This is a huge positive for those who qualify for the required loan to value criteria when looking at their mortgage options. It demonstrates yet further positivity for people to seek an attractive mortgage deal for themselves.
“While the mortgage market tends to be very reflective of the wider economy, [the] news does show strong market confidence in bringing more attractive deals to the fold.”
More limited company landlord options
Multiple reports have shown a huge rise in the number of limited company landlords entering the buy-to-let market over the past couple of years, spurred on by tax changes which can make owning a rental property through a company more tax-efficient in some cases.
Lenders are increasingly seeing the opportunity in the space, and this has led to more competitive mortgage rates for limited company landlords.
This week, both Coventry For Intermediaries and The Mortgage Works (TMW) have updated their products in a bid to improve flexibility for landlords who are expanding or reassessing their portfolios. Coventry has also upped its maximum lending exposure for these products, while upping the number of properties per landlord with the lender.
Fleet Mortgages has also lowered its mortgage rates across its limited company ranges, as well as for standard, HMO and multi-unit freehold blocks. It also offers ‘green mortgage’ options, with lower mortgage rates for properties with EPC ratings between A and C.
