Full list of mortgage lenders dropping rates below 5% - including Nationwide

22 September 2023 , 11:08

815 0

Some lenders are finally offering mortgage deals under 5% (Image: Bloomberg via Getty Images)

Mortgage rates are finally dropping below 5% as the Bank of England decided to keep its base interest rate at 5.25% this week.

Competition for the best deals is heightening, with several lenders having lowered rates to levels the UK has not seen since July. Nationwide and TSB have already announced cuts to their mortgage rates after the surprise Bank of England announcement yesterday, with many lenders expected to announce more in the upcoming weeks.

Yorkshire Building Society began the trend by introducing a five-year fixed-rate offer at 4.99% for both first-time buyers and those looking to remortgage. Nationwide also said it was cutting rates after the Bank of England made its announcement yesterday. The building society said rates on its five and ten-year fixed rates for first-time buyers and home movers will now start at 4.94%. Its two-year fixes however will be around 5.5%.

According to data compiled by MoneyFacts.co.uk, Virgin Money and Natwest are offering five-year fixes with an interest rate of 4.97% and 4.99% respectively. Danske Bank is also offering rates from 4.92% over a number of products. Lloyds bank is offering a number of products lower than 5% with some reaching as low as 4.83%.

Other lenders have also been cutting rates too with them teetering on the edge of 5%.

Couple living on cruise ship as it makes 'more sense' than paying mortgage

HSBC has a five-year fix at 5.09% for home buyers, and NatWest announced reductions recently of up to 0.31 percentage points across its fixed residential and buy-to-let deals with five-year fixed-rate deals starting at 5.14%

TSB is also offering rates starting from 5.09% for its five-year fixes. Other deals still remain closer to 6% with its two-year fixed rate sitting at 5.74%. Its three-year fixed rates for remortgage have been cut by up to 0.2 percentage points and start from 5.64%.

You should be aware that these offers all are based on things such as how much deposit you have and can include extra fees.

MoneyFacts.co.uk report that the average two-year fixed residential mortgage rate sits at 6.56% today and the average five-year fixed rate is 6.06%.

Nick Mendes, of the independent mortgage advisory firm John Charcol said: “Nationwide and TSB reacted quickly following the Bank of England rate announcement yesterday, in making further fixed rate reductions. Nationwide’s last rate cut was only last week so seeing another repricing so quickly is welcome news. It will be interesting to see which other lenders follow suit.”

Interest rates have been at an all-time low for the last decade and it's important to know what this means for your mortgage. Mortgage lenders will all charge different rates for different circumstances with different products. The higher the interest rate and the longer the term, the more expensive your borrowing will be.

So choosing the right mortgage deal is very important and at the moment may feel quite difficult. When you are looking at mortgage rates there are many factors you need to look into than just the deal. If you're comparing deals yourself, you should keep an eye on the full cost, and not just the initial rate.

If you're not sure how best to proceed, you should always speak to a mortgage broker first before making any big decisions. Mortgage brokers can help you find the most suitable mortgage product for your personal circumstances.