Best UK mortgage deals of the week

Mortgage rates are expected to continue to fall throughout 2024. (Richard Baker via Getty Images)

Mortgage rates continue to fall, providing some relief to UK households and prospective homebuyers, with deals under 4% now available on the market.

The average rate on a two-year fixed deal this week stood at 5.69% while for a five-year deal, rates came down to 5.26%, according to figures from Uswitch.

The big lenders continued to cut mortgage rates as competition between banks heats up and borrowing costs ease.

The exception to this is Santander, as the lender nudged rates up to 0.20 percentage points on some fixed rate products.

"Lenders' margins at the moment are tight, so this increase will be expected," said Elliott Culley, director of Switch Mortgage Finance.

"Borrowers should not panic as its unlikely this will be a trend and overall across the year, predictions are for rates to fall further".

HSBC mortgage rates

First time buyers can get a 4.59% fixed rate deal for two-years at HSBC (HSBA.L) or 4.24% for a five-year deal. Both cases assume a 60% loan to value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit.

NatWest mortgage rates

NatWest (NWG.L) has an online only deal that offers 3.94% for a five-year deal with a £1495 fee, assuming a 60% LTV. It offers the same rate for green mortgages – this product is only available for properties with an Energy Performance Certificate (EPC) rating of A or B – but the fee here drops to £995.

For a 2-years fix, the cheapest a customer can get is 4.44% online.

Santander mortgage rates

Santander (BNC.L) has increased selected residential fixed rates for both purchase and remortgage clients – as well as withdrawing all of its first-time buyer fixed rates with £500 cashback. A 90% loan-to-value (LTV) 3-year fixed rate for purchase clients was also withdrawn.

Read more: Is now the time to move from a variable to a fixed mortgage?

For a £300,000 mortgage with a 40% deposit, Santander's two-year fix starts at 4.25%, with £1,224 in fees. For the longer five-year fix, the rate drops to 4.04%.

Skipton mortgage rates

The building society has brought down five-year interest rates by 0.15% to 4.99% on a 90% LTV. Its two-year fixed rate at 75% has gone down from 4.99 % to 4.72%. It comes with a £1,495 fee.

Barclays mortgage rates

Barclays (BARC.L) is offering a 4.09% interest rate for two-year deals for prospective homebuyers with a 40% deposit (60% LTV). The fee is set at £899. The bank has a 4.08% rate for the same deal but that is reserved for Premier Exclusive clients.

Read more: How hard is it to get on the property ladder?

When it comes to five-year mortgage deals, the cheapest you can get is 4.39% unless you're borrowing over £2m. In that case, the rate drops to 4.32%.

Nationwide mortgage rates

Nationwide (NBS.L) has cut rates by up to 0.81 percentage points and introduced a new range of fixed and tracker rate products with a £1,499 fee. These changes mean Nationwide’s rates start at 3.84% – its lowest level in eight months, for new remortgaging customers on a five-year fixed deal.

New members and first-time buyers can get a slightly higher five-year fixed rate of 3.85% for a 60% LTV mortgage. For a shorter two-year deal the rates start at 4.20%.

Halifax mortgage rates

Halifax currently offers a two-year fixed rate up to 60% loan-to-value (LTV) at 4.27%, as well as a two-year fixed rate up to 85% LTV at 4.57%.

The lender also introduced a five-year fixed rate up to 80% LTV at 4.18%, and a five-year fixed rate from 90% to 95% LTV at 5%.

Cheapest mortgage deal on the market

Prospective buyers might be struggling to secure a good deal amid high interest rates and saving up for a deposit. Nationwide's under 4%-deals appear to offer some of the cheapest rates for prospective homeowners, although they require a considerable deposit to secure.

Given that asking prices on newly-listed homes rose in January to £359,748, a 40% deposit equates to almost £150,000.

Will mortgage rates go down in 2024?

Mortgage rates have risen substantially as the Bank of England increased the interest rates to a 15-year high in a bid to tackle inflation.

However, the consensus is that interest rates have peaked and that 2024 will see the Bank of England will begin to cut rates as inflation eases.

The BoE's interest rate is currently set at 5.25%. Markets are expecting interest rates to fall to 5% by May, 4.75% in June, 4.5% in August and 4% in November.

Read more: UK mortgage approvals rise as lenders cut rates

However, a surprise increase in inflation is forcing market analysts to reprice their bets, with some saying that cuts will only start in August.

If the Bank of England cuts interest rates as expected, mortgage rates will continue to come down throughout 2024.

About 1.6 million existing borrowers have relatively cheap fixed-rate deals expiring this year.

Watch: How much money do I need to buy a house?

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