Homebuyers Can Get Sub-4% Mortgages From All The Big Six Banks As Hsbc Cuts Rates

All of the so-called “big six” mortgage lenders now offer rates below 4 per cent for homebuyers after HSBC slashed their prices on Monday.

The bank cut its five-year mortgage for those purchasing with big deposits of at least 40 per cent to 3.93 per cent, the cheapest deal on the market.

It also cut their two-year fix for those with deposits of that size to 3.91 per cent, which can only be bettered by Lloyds customers who are already members of the Club Lloyds scheme – who can get a rate of 3.79 per cent.

Some HSBC Premier customers can also get rates for as low as 3.88 per cent.

HSBC also lowered rates for those remortgaging to 3.99 per cent and 4.07 per cent for five and two-year fixes respectively.

All of the so-called “big six” – which also includes Lloyds Banking Group, NatWest Group, Nationwide Building Society, Santander and Barclays – now offer rates below 4 per cent for those buying properties, and many offer them for those remortgaging too.

Other banks are also cutting their rates too. TSB has said it will reduce prices from Tuesday (29 April) including launching some deals below 4 per cent.

MPowered Mortgages has also cut its three-year fixed rates for remortgage customers to 3.98 per cent for those with a 40 per cent deposit paying a £999 fee.

Aaron Strutt of Trinity Financial said: “The lenders are really going for it with many of them pushing their sub-4 per cent two-year fixes in particular.

“HSBC has topped the best buy tables with their latest reprice which is positive for the market. More rate changes are expected this week.”

Banks have been able to reduce their prices after a combination of Donald Trump’s tariff plans – which are set to dampen the economy – and lower-than-expected inflation figures, which have raised the prospect of multiple Bank of England rate cuts in 2025.

Financial markets now expect at least three more interest rate cuts in 2025, with the next one only weeks away.

Although lower mortgage rates are generally good news, this comes with a backdrop of a potentially worsening economy, which could mean fewer jobs being available, and pay rises being smaller than otherwise.

Nick Mendes, of brokers John Charcol, said: “It’s great news for borrowers that all of the top six lenders are now offering rates below 4 per cent. This marks a real shift from where we were six months ago and reflects growing competition among lenders keen to secure business as market conditions improve.”

Fixed mortgage prices are heavily based on swap rates, which follow long-term predictions for where the Bank of England base rate will go in the future. As they have come down, so have mortgage rates.

Mendes added: “Looking ahead, we expect rates to remain fairly stable, with room for further reductions if swap rates continue to soften. Currently, the Sonia swap curve shows modest declines across the board. This suggests lenders still have some flexibility to sharpen their rates. That said, we’re unlikely to see rates tumble dramatically.

Cheapest mortgage rates

The cheapest mortgage rate available depends on what sort of deposit you have, whether you are buying or remortgaging, and what length of time you want to fix your rate for.

Here are some of the cheapest deals on the market right now. All rates are for two-year fixes unless otherwise stated:

• Buyer with 40 per cent deposit – Lloyds (3.79 per cent for Club Lloyds customers) or HSBC (3.91 per cent for all)
• Remortgaging with 40 per cent equity – Nationwide (3.99 per cent) or HSBC (3.99 per cent for a five-year fix)
• First-time buyer with 10 per cent deposit – Lloyds (4.54 per cent for a two-year fix or 4.38 per cent for a five-year fix)

“Most lenders are still balancing competitiveness with margin protection, so we are more likely to see a few weeks of marginal decreases rather than any sharp drops.”

Justin Moy of EHF Mortgages also suggested we could see smaller rate drops in the future. He said: “Whilst Swap rates have been reducing over the last few weeks, if we see any further rate cuts, they will be small and probably more for the purchase market to keep the home buying market as buoyant as possible.

“Those looking for a new deal on a remortgage will see some benefits too, but will need to react quickly if rates do wobble around given the global economies are far from settled at the moment.”

Although cheaper options are available, the average two-year fixed mortgage rate is 5.21 per cent, while the average five-year fixed mortgage rate is 5.12 per cent, according to Moneyfacts.

The best deals on the market are also only going to those with large deposits or equity in their home.

Deals for those purchasing properties are also generally cheaper, and two-year fixes are generally lower than five-year ones.

Mortgage brokers, housing experts and academics say that cheaper borrowing and more access to credit – as some banks are relaxing their stress tests that check how much people can borrow – could see house prices rise as people can afford to take out bigger loans.