Finding the best mortgage deals for homeowners, home movers, and especially first-time homebuyers doesn’t need to be an uphill battle. 

1 in 5 credit applications is declined, 10% of which are for mortgages¹. 

But you don’t need to be part of the 10% and we’re here to tell you everything you need to know about the best mortgage deals currently on offer in the UK. 

Best Mortgage Rates in the UK

The best mortgage rates in the UK average between 5% and 7%.

Mortgage rates are ever-changing thanks to rising inflation and economic turbulence.

In an effort to bring inflation under control, the Bank of England² hiked the base rate to 4%. 

This is up from the previous 3.5%. 

What does this mean for you?

The hike in rates led to a decline in the demand for mortgages, but it also meant a decrease in property prices. 

Prices are slipping back for the first time in a year, and the war between banks and building societies to slash their rates has intensified.

Disclaimer: *While we regularly review our rates, these may have shifted since our last review.

HSBC Mortgage Rates

HSBC mortgage rates were slashed below the base rate in an effort to boost demand for mortgages. 

This means that people are able to fix their monthly home loan for 5 years at 3.99%³.

The downside to this great deal, however, is that it’s not tailored for first-time homebuyers but rather for homeowners who are remortgaging or switching rates.

Halifax Mortgage Rates

Halifax also reduced its mortgage rates to under 4%, but only on its 10-year deal⁴.

The cuts came into effect on February 15, 2023.

This option is perfect for home buyers who are looking for the security of a longer-term fixed-rate mortgage. 

Santander Mortgage Rates

Santander cut its fixed-rate mortgages by up to 0.50% percentage points for purchase. 

This means that its new 5-year fixed rate for purchases is currently standing at 3.99%⁵.

Barclays Mortgage Rates

Barclays is offering a 5-year fixed-rate mortgage deal at 4.08%.

But this number could change depending on your status as a first-time home buyer or a homeowner looking to remortgage.

The amount of the deposit on the property also plays a role, but even with an amount as little as a 25% deposit, Barclays still offers a very reasonable fixed 5-year deal of 4.41%⁶.

Natwest Mortgage Rates

Natwest cut its fixed-rate mortgage deal by 0.2 percentage points.

However, compared to the other lenders, Natwest only offers 4.68% for a 2-year fixed deal. 

The bank’s 5-year fixed rate is a worthy contender when compared to its competitors, with Natwest offering a rate of 4.33%⁷.

Fixed Mortgage Rates

Fixed-rate mortgages can be taken over different periods of time, for example, 2 years, 5 years or 10 years. 

There are, however, several elements to think about, specifically when it comes to the different types of mortgages offered by lenders⁸. 

2 Years

A 2-year deal on a mortgage averages around 5.16%. 

Halifax offers a very competitive rate of 4.63% based on an 80% loan-to-value (LTV).⁷ This is undercut by Barclays, which offers 4.3% on 70% LTV and 4.2% on 60% LTV⁹. 

2-year deals are a great option in a fluctuating mortgage market with the possibility of lower interest rates in the future.

5 Years

The average 5-year fixed mortgage rate in the UK is 4.81%. 

This is a nudge above the Bank of England’s base rate. 

But banks and building societies are moving closer to the base rate, with HSBC offering a 3.99% fixed rate on their 5-year mortgage deal¹⁰.  

However, HSBC is the only bank that has dropped below 4% on its 5-year deal, with Halifax offering 4.28%¹¹.

10 Years

On a 10-year fixed term, Virgin Money, Lloyds Bank, and Halifax are offering under 4%.

This is for those homeowners who’d prefer a bit more security.

Best Mortgage Deals

To find the best mortgage deals, you need to know what to look for in terms of the type of mortgage. 

This will depend on whether you’re a homeowner, a home mover, or a first-time homebuyer, as well as your deposit. 

Banks and building societies tailor these mortgages according to your status as a purchaser. 

Best Mortgage Rates for Homeowners

Homeowners have several options when it comes to the best mortgage rates available on the market. 

This is specifically because rates are falling and product choice is increasing. 

What does this mean? 

The market is continuing to stabilise and homeowners should take advantage of what is on offer, especially when it comes to the lower interest rates on 2-year mortgage deals. 

Homeowners should, therefore, specifically consider the 4.63% offered by Halifax and the 4.3% offered by Barclays because most of these lower rates are designed for homeowners who have a deposit or equity of 40% of the property’s value. 

Best Mortgage Rates for Home Movers

The best mortgage rates for home movers are normally over a shorter term, such as a 2-year or 5-year mortgage deal. 

One such example is HSBC’s 5-year deal at 3.99% or the 5-year deal offered by Barclays, which stands above the base rate of 4% at 4.08%¹².

Another option to consider is the 2-year deal offered by Halifax at 4.63%, but home movers would need to consider if their mortgages are portable or not, which could mean that they’d have to reapply for a mortgage on the new property¹³.

Best Mortgage Rate for First-Time Home Buyers

The best mortgage rate for first-time home buyers normally averages just above 5%.

There is however good news and bad news for first-time home buyers when it comes to current mortgage rate deals in the UK. 

The good news?

The market is looking up, and those first-time home buyers with small deposits could easily walk away with a mortgage rate just above 5%.

The bad news?

Unfortunately, rates below the base rate are mostly tailored for homeowners, home movers, or first-time home buyers with bigger deposits. 

Barclays offers a 5-year fixed rate of 4.29% for 75 LTVs¹⁴, while HSBC offers a 5-year fixed standard rate of 4.19% for the same LTV¹⁵. 

Halifax has a higher rate of 4.33% over a 5-year term. 

Common Questions

In Conclusion

Whether you’re a first-time buyer looking to purchase your new home, a homeowner considering ways to save some money, or even a home mover excited about a new adventure, there are many deals for you to take advantage of at this moment.

The price war between banks and building societies is expected to continue this year as the Bank of England considers hiking interest rates again amid an uncertain economic climate. 

Britons should take heed of this opportunity to either invest in property or save some money by considering the best mortgage deals out there.