![\"NatWest](\"https:\/\/www.europesays.com\/britain\/wp-content\/uploads\/2026\/05\/natwestfront.jpeg\")
\t\tNatwest sweetened its mortgage deals. (Image: PA).\t<\/p>\n\t\t\tFriday 29 May 2026 10:55 am\n\t\t\t<\/p>\n
\t\tNatwest sweetened its mortgage deals. (Image: PA).\t<\/p>\n
Natwest and Barclays have become the latest lenders to sweeten up their mortgage deals, as hopes remain high that a peace deal will be reached in the Middle East<\/a> that would bring calm to the interest rate environment.<\/p>\n Both lenders have unveiled reductions in mortgage rates, with Barclays cutting its rates across the board by up to 0.43 per cent. Meanwhile, Natwest has cut its rates by up to 0.54 per cent with its two-year tracker cut to 4.42 per cent.<\/p>\n This follows a similar move by Santander, which lowered its rates by up to 0.23 per cent.<\/p>\n The re-pricing comes amid changes in swap rates, which serve as a primary benchmark for pricing fixed-rate mortgages and reflect market expectations for future interest rates over 2, 5, or 10-year terms.\u00a0<\/p>\n \u201cMomentum is continuing to build across the mortgage market,\u201d Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, said.<\/p>\n \u201cThese latest reductions should also provide reassurance that market conditions are gradually improving.\u201d<\/p>\n Mortgage market hit by Middle East volatility<\/p>\n Interest rate expectations<\/a> have been brought some reprieve through slowly emerging details around a potential peace deal between Iran and the US.<\/p>\n US and Iranian negotiators are reported to have reached an agreement on a 60-day memorandum of understanding that will extend the currently in-place ceasefire and kick off negotiations on Iran\u2019s nuclear programme, according to Axios.<\/p>\n Whilst Iran is reported to have rubber stamped the deal, a final green light is still expected from Donald Trump.<\/p>\n Hopes of peace come despite the two nations exchanging strikes earlier this week, each accusing the other of violating ceasefire terms.<\/p>\n Vice President JD Vance has hinted a deal was \u201cvery close\u201d but added the US was \u201cnot there yet\u201d.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tFTSE 100 banks are facing \u00a32.5bn of headwinds \u2013 HSBC and Barclays are in the firing line<\/a><\/p>\n Economic pressures from the war have stoked inflationary fears and served as the central driver for fears of an interest rate hike. <\/p>\n Iran\u2019s closure of the Strait of Hormuz \u2013 a narrow waterway in the Gulf where around a fifth of the world\u2019s oil supply flows through \u2013 has triggered a global energy shock. <\/p>\n UK households are bracing for a \u00a3200 rise in energy bills<\/a> next month after energy watchdog Ofgem\u2019s gave its latest price cap update this week.<\/p>\n Ofgem said the surge was driven by the conflict, with potential to climb further in October.<\/p>\n Bank more likely to cut than hike rates, says Jefferies<\/p>\n In March, the Bank of England held rates in a unanimous decision over fears the war would send prices spiralling. <\/p>\n Mohit Kumar, chief European economist at Jefferies, said should a peace deal be formally inked the rates market \u201cshould see a greater reaction than equities\u201d.<\/p>\n He forecast that the next move from the Bank of England \u201cwould be a cut and not a hike\u201d, with a reduction to around three per cent \u201cby the middle of next year\u201d.<\/p>\n The mortgage market has been rocked by the volatility in the rate expectations with lenders pulling deals at the fastest rate since Liz Truss infamous mini-Budget\u00a0amidst growing agitation around the war.<\/a><\/p>\n Nearly 500 homeowner mortgages disappeared from the market in mere days, according to finanical information platform\u00a0Moneyfacts<\/a>, as average mortgage rates breezed past the five per cent mark in early March.<\/p>\n Deal lifespans also hit a record low of just eight days in April<\/a> as the overall pool available hit the lowest count in two years.<\/p>\n \t\t\t\t\tRead more<\/p>\n