On Monday HSBC announced it was reducing prices on residential and buy-to-let fixed-rate mortgages. Today, Barclays and Halifax have made reductions to a range of their fixed mortgage rates too.
It means Barclays now offers a mortgage rate as low as 3.56%. Although this product is for its ‘Premier’ customers who are moving home and have a hefty deposit of at least 40%, it highlights how competitive the market has become.
Just before Christmas the Bank of England cut interest rates to 3.75% and Moneyfacts reported average rates had fallen to their lowest in three years.
Today, the Moneyfacts Average Mortgage Rate is 4.86%, which compares to 4.90% a month ago on 8 December.
Mortgage experts explained this week’s rate cuts, straight after the festive break, should be viewed as a positive sign by borrowers.
Shaun Sturgess, director at Swansea-based Sturgess Mortgage Solutions, talking to the Newspage agency said this was an important signal of the direction rates were headed.
“These aren’t headline-grabbing cuts,” he said, “but lenders don’t move first unless they’re confident funding costs are easing and the wider outlook is improving.
“My view is that this is the start, not the finish. I expect steady, gradual reductions through 2026 rather than sharp drops. For first-time buyers in South Wales, this opens real opportunity.”
Meanwhile, Katy Eatenton, mortgage & protection specialist at Lifetime Wealth Management, also speaking to Newspage, said these reductions would prove beneficial to the estimated 1.9 million people due to remortgage in 2026.
“If one big lender makes some cuts, as it has today, we could see a domino effect that will delight borrowers,” she continued.
“A huge number of people are set to remortgage this year and mortgage rates edging down will help to reduce the pressure many households are under.”
What to do if you are about to take out a mortgage
For anyone about to take out a mortgage now or in the next six months, you may be wondering if rates are likely to fall further.
Whilst mortgage brokers think, in the short term, more lenders will reduce their prices – the markets have also predicted the Bank of England will cut interest rates again at least once if not twice this year.
However, this is not set in stone and borrowers looking for a house purchase mortgage or a remortgage are urged to speak to a broker to ensure they don’t miss out on the best deals and find a product tailored their needs.
Nick Mendes, mortgage technical manager at mortgage broker John Charcol, explained the outlook for borrowers in 2026 largely depended on circumstances.
“Those coming off two-year fixes taken in 2024 should see some improvement,” he said, “while borrowers rolling off five-year deals agreed when rates were near historic lows will still face higher repayments, even after recent cuts.
“Competition between lenders remains intense, which should limit how far rates can rise, but the scope for sharp further falls looks limited unless markets become convinced Bank Rate will settle closer to 3%.”
Mendes also thinks there are early signs of stabilisation in the housing market.
“Real house prices fell in 2025,” he continued, “but easing mortgage rates, softer affordability stress tests, and continued criteria improvements – particularly for first-time buyers – point to modest growth in 2026, with significant regional variation and flats continuing to lag behind houses.”