Barclays, HSBC, Santander and NatWest in mortgage price war - savings worth over £1,000

Millions are being thrown a financial lifeline as a full-blown mortgage price war sees banks and building societies launch significant rate cuts.

Major names – including Barclays, HSBC, Santander, NatWest and Nationwide – have all cut fixed mortgage rates, with deals now dipping below 4% with more to come over the summer.

The lowest two-year fix is now just 3.79% from Lloyds – a deal that could save borrowers more than £500 a year compared to rates available just five months ago.

Even more lenders, including Halifax and Santander, are offering sub-4% rates as the battle for mortgage customers intensifies.

It comes as 1.68 million borrowers face the end of their current fixed deals this year – and new buyers continue to be squeezed by higher stamp duty bills.

A buyer taking the Lloyds deal on a £200,000 mortgage over 25 years would see monthly repayments of £1,033 – that’s £564 a year less than in December when the best rate was 4.22%.

HSBC, meanwhile, is offering a two-year fix at 3.89% for those remortgaging, with a £999 fee.

For those seeking longer-term certainty, five-year fixes have dropped too – from 4.1% in December to 3.88% at NatWest and 3.99% at HSBC. All apply to loans up to 60% of a property's value.

Experts say the cuts are being fuelled by expectations that the Bank of England’s base rate, currently at 4.5%, will fall faster than anticipated – possibly due to mounting fears of a recession triggered by Donald Trump’s trade tariffs.

The Bank has already trimmed rates three times from last summer’s 5.25% peak. More cuts are widely expected – perhaps as many as five by November - according to US banking giant Morgan Stanley, which would take the base rate to 3.25%.

Barclays’ chief UK economist Jack Meaning said: “We expect the Bank of England to cut the base rate at the next four opportunities, starting on Thursday.”

Karen Noye, of wealth manager Quilter, warned: “The Bank of England will be watching Trump’s moves closely as the end of the 90-day tariff pause draws nearer. They will have a deciding impact on how hard and fast it will need to cut rates.

“Mortgage rates of 3% still seem quite a way off for now, but should the Bank accelerate its plans we could see lenders offering customers deals nearer that mark.”

Hina Bhudia, from mortgage broker Knight Frank Finance, said: “What began as a repricing to reflect a shift in the economic outlook has developed into a full-blown price war.

“Lenders are squeezing margins and overhauling affordability criteria in an attempt to grab extra market share.”

And it’s not too late to switch if you’ve already agreed a deal. Around 325,788 mortgages were approved between December and February – when rates were higher. Many of those borrowers may now be able to grab a cheaper option.

L&C, the mortgage broker, estimates its clients saved a whopping £40 million last year by switching – with some doing so multiple times as rates fell.

One customer with a £450,000 mortgage locked in at 4.06% in August but cut their rate to 3.8 per cent by February – saving £64 a month, or £768 a year.

Another buyer dropped from 5.1% to 4.95% with the Bank of Ireland, saving £100 a month – or £2,500 over two years.

Experts warn, though, that waiting for better deals could backfire.

David Hollingworth, from L&C, said: “With so much uncertainty, things could turn quickly, so locking a rate in and reviewing it later means you don’t play a risky waiting game.

“Holding off in the hope of lower rates could be a painful approach if things take another turn.”

Borrowers don’t necessarily need a broker to track rates – but having one can help flag better deals quickly. You can also go directly to your lender and request a product transfer.

If a lender cuts its rates before your new mortgage begins, you can often switch to the cheaper option without another credit check or new application – and you don’t need to stick with the same deal term or fees.

But changing lenders entirely means reapplying from scratch – with the risk of higher costs or failing new affordability checks.