Both banks have announced changes
Santander is making cuts(Image: Ceri Breeze via Getty Images)
Following Santander on Friday, NatWest is the latest lender to announce mortgage rate cuts — of up to 0.21% — with brokers saying lenders are competing hard and are “willing to take a margin hit today to keep pipelines alive tomorrow”. NatWest is reducing rates across the board, but two-year fixed rates are seeing the biggest cuts.
For example, a two-year fixed rate purchase mortgage at 80% loan-to-value (LTV) will decrease by 0.21%, from 4.95% to 4.74%. The lender’s two-year fixed rate purchase mortgage at 75% LTV will decrease by 0.2% from 4.89% to 4.69%, while its two-year First Time Buyer fixed rate, at 85% LTV, is decreasing by 0.19% from 4.98% to 4.79%, with £250 cashback. All three products have fees of £995.
Santander, meanwhile, is reducing all new business first-time buyer (FTB) 10-year fixed rates and selected home mover (including new build and large loans) fixed rates by up to 0.15% — and selected remortgage rates, including large loans, by up to 0.19%. New business buy-to-let purchase and remortgage fixed rates are also being cut by up to 0.23%, although an FTB 85% loan-to-value (LTV) 2-year fixed rate with a £999 fee will rise by 0.05%. The lender’s My First Mortgage fixed rate isn’t changing.
Meanwhile, two-year tracker rates for FTBs and home movers – including new build – will be reduced by up to 0.5%, and two-year tracker rates will fall by up to 0.4% across home mover and remortgage large loans. For product transfers, selected residential two, three and five-year fixed rates will be reduced by up to 0.15%, while all buy-to-let two and five-year fixed rates will be cut by up to 0.23%.
Riz Malik, Independent Financial Adviser at Southend-on-Sea-based R3 Wealth, said lenders are fighting for new business.
He continued: “As we move towards the end of the first half of 2026, lenders are keen to bolster their mortgage books and take on more new business after a muted couple of months due to the war in the Middle East. They are still conscious of the global economic backdrop but are also keen to do their best to get business on their books. Reductions in tracker rates will be especially welcomed by those not seeking to fix.”
Ken James, director at London-based Contractor Mortgage Services, agreed that competition is driving the cuts but warned they may not be enough to get the market moving: “Lenders are fighting for volume in a sluggish market and they’re willing to take a margin hit today to keep pipelines alive tomorrow. However, this is a pricing strategy rather than a market turning point. Is it enough to get the UK’s housing market moving again? Not likely.”
Some brokers were more upbeat.
Richard Davidson, mortgage advisor at onlinemortgageadvisor.co.uk, said: “This is a strong move from Santander to reduce across the board and an indication that other lenders should follow soon. And with NatWest, that seems to be the case.”
While Katy Eatenton, mortgage and protection specialist at St Albans-based Lifetime Wealth Management, said that “if mortgage rates continue to fall, and this is what they appear to be doing, confidence will start to return”.
Aaron Strutt, product and communications director at London-based Trinity Financial, noted that it was only early last week that it seemed rates were going north again.
He said: “Swap rates have started to come down again and some lenders are still improving their mortgage rates even though it looked pretty certain they were going to start putting them up just a few days ago. There is a lot of economic uncertainty at the moment, but lots of people still want to get on the property ladder. We are speaking to more renters trying to purchase their rented homes using concessionary purchase mortgages as the number of buy-to-let properties being put on the market continues to rise.”
Justin Moy, managing director at Chelmsford-based EHF Mortgages, said the cuts should have a positive impact: “It’s good to see Santander bringing its rates into line with the rest of the recent changes on the High Street. With almost every type of borrower benefiting in this round of changes, this will have a positive impact on those looking for a new deal or who are in an active application.”
Meanwhile, Babek Ismayil, CEO at homebuying platform OneDome, said: “Conditions remain far more challenging than what they were in the mortgage market, but in the property market they are very favourable, as people are in a position to negotiate hard on price.”