by Sam Akbay
What It Means for Buyers and Homeowners
Good news for anyone thinking about buying a home or refinancing their mortgage—UK lenders are starting to cut mortgage rates, and this could mean big savings.
This week, Coventry Building Society became one of the first big names to lower their two-year fixed mortgage rate to below 4%, offering a deal at 3.89%. Other lenders like Clydesdale Bank, Newcastle Building Society, Co-operative Bank, and even TSB, Metro Bank, and Bank of Ireland have followed suit by reducing their rates too.
Why Are Rates Coming Down?
There are a few global factors at play. Financial experts believe the Bank of England is likely to cut interest rates more than expected this year to prevent a possible economic slowdown.
Adding to this uncertainty, the U.S. government has introduced new trade tariffs on imports from over 60 countries. This has added pressure to the global economy and is part of the reason markets expect rates to drop further.
As a result, lenders are adjusting their mortgage products to stay competitive and appeal to homebuyers looking for value.
What Are the New Average Rates?
According to financial data firm Moneyfacts:
The average two-year fixed mortgage rate is now 5.3%
The average five-year fixed rate has dropped to 5.15%
While these are just averages, individual products (like Coventry’s 3.89% offer) can be much lower—especially for those with a large deposit (65% loan-to-value).
What’s the Catch?
Keep in mind that some of these low-rate deals come with fees, like Coventry’s offer which has a £999 fee. And not everyone will qualify—borrowers need a healthy deposit and good credit history to access the best rates.
Also, while rates are coming down, many homeowners coming off fixed-rate deals from 2–5 years ago may still face higher monthly payments when they remortgage.
In fact, the Financial Conduct Authority reports that 1.3 million homeowners will need to remortgage between April and December 2025. That’s a lot of people facing the current market conditions head-on.
What Happens Next?
Experts say we may see more rate cuts soon, especially from the “Big Six” lenders like Halifax, HSBC, Nationwide, Santander, Lloyds, and NatWest, who are currently holding off but could make moves any day now.
When the big banks act, other lenders usually follow—so now might be a great time to review your mortgage options or start your property search while rates are on a downward trend.
What Does This Mean for You?
If you’re:
A first-time buyer – this could make getting on the ladder slightly more affordable.
A homeowner with a fixed rate ending soon – it’s a smart time to start comparing remortgage deals.
An investor – lower borrowing costs might open up new opportunities for purchases or refinancing.
At Sam Akbay Property Agency, we’re always watching the market to help our clients make informed decisions. If you’re unsure what these changes mean for your specific situation, get in touch—we’d love to help.
Thinking about your next move? Book a free consultation with us today and explore your options with a team that puts your goals first.
