What’s changed: Updated 7 October 2026: the average five-year fix reached 6% on 5 October, with the two-year at 5.98%. Earlier, 1 October: the two-year average at 5.93%. Full update history.
Educational, not financial advice. Savvy Investor Guide is published by The Savvy Investor Ltd. We are not authorised or regulated by the Financial Conduct Authority. We are not financial advisers. Nothing on this site is personal financial advice. What you read here is general information to help you understand how things work. If you need advice about your specific situation, speak to a qualified, FCA-authorised financial adviser.
What this article covers: The mortgage rate cuts announced by major lenders in the week of 7 to 13 May 2026, why the average two-year fixed rate remains around 5.5% despite those cuts, the role of gilt yields and swap rates in setting mortgage pricing, and the political and market backdrop that pushed gilt yields to multi-decade highs in mid-May. What it does not cover: Advice on whether to fix, remortgage, or stay on a tracker. That depends on your individual circumstances and a qualified mortgage broker is best placed to help you with that decision.
Several of the UK’s biggest mortgage lenders reduced rates this week. Santander cut by up to 50 basis points from 11 May. Halifax trimmed up to 35 basis points on remortgage, first-time buyer, and home mover products. BM Solutions, Halifax’s buy-to-let arm, cut product transfer rates by up to 25 basis points. Nationwide reduced two, three, and five-year fixed rates by up to 25 basis points. If you have been watching the headlines, you could be forgiven for thinking the direction of travel is clearly down.
Except the average two-year fixed mortgage rate is around 5.5% as of early July 2026 on the Moneyfacts all-lender measure, with Uswitch putting the two-year average at 5.24% at 75% loan-to-value. That is down from the spring peak: the average had climbed from about 4.84% in early March to a 5.58% spike on 26 March and to roughly 5.78% by May, and it has eased back since without collapsing. So how do you square a week of lender cuts with an average rate that is still sitting around 5.5%?
The answer is in what is happening to UK government borrowing costs right now, and in the difference between a lender trimming its margin under competitive pressure and a wholesale repricing of mortgage debt. This article explains both.
In short
- Santander cut rates by up to 50bps from 11 May; Halifax by up to 35bps; BM Solutions (BTL) by up to 25bps; Nationwide by up to 25bps on two, three, and five-year fixes.
- Despite those cuts, the average two-year fixed rate is around 5.5% as of early July 2026 (about 5.78% at the mid-May peak), up from 4.84% in early March.
- UK ten-year gilt yields hit 5.1% on 11 to 13 May 2026, the highest since July 2008. The thirty-year gilt briefly touched 5.81%, the highest since 1998.
- Swap rates, which track gilt yields and determine what lenders pay for wholesale funding, remain elevated. That is why the average rate has not fallen despite individual lender cuts.
- Political uncertainty added to market pressure. Over 70 Labour MPs publicly called for Keir Starmer’s resignation following local-election losses. Pantheon Macroeconomics estimated that replacing the Prime Minister could add around 45 basis points to ten-year UK borrowing costs.
- The Bank of England held the base rate at 3.75% on 30 April (8-1 vote), and Bank Rate has stayed at 3.75% ever since. The next Monetary Policy Committee decision is Thursday 17 September 2026.
- The May lender cuts reflect margin trimming under competition. They are not a signal that wholesale mortgage funding costs have fallen.
What lenders actually cut this week
Four major lenders made rate changes in the week of 7 to 13 May 2026. Here is what each one changed, according to data from Kael Tripton’s mortgage rate tracker and coverage from MPA Magazine.
Santander: up to 50bps from 11 May
Santander made the sharpest single-lender cut of the week, reducing selected fixed rates by up to 50 basis points from 11 May. A 50-basis-point cut on a five-year fix sounds material, and on paper it is. On a £250,000 repayment mortgage over 25 years, 50bps lower translates to roughly £65 to £75 less per month depending on the starting rate, before fees. That said, Santander’s cuts were selective: the deepest reductions applied to specific loan-to-value bands and product types, not across the board.
Halifax: up to 35bps on remortgage, FTB, and home mover
Halifax reduced rates by up to 35 basis points across remortgage, first-time buyer, and home mover product ranges. Halifax is the UK’s largest mortgage lender by volume, so its pricing tends to signal where the high-street market is heading. The fact that it cut, rather than held or increased, is notable. Again, “up to” matters here: the deepest cuts apply to the products where Halifax wants to win business, typically lower loan-to-value tiers where default risk is lower.
BM Solutions: up to 25bps on buy-to-let product transfers
BM Solutions, which is Halifax’s specialist buy-to-let brand, cut product transfer rates by up to 25 basis points. Product transfers (where an existing customer moves to a new deal with the same lender rather than remortgaging to a new one) are a competitive battleground. Lenders have been fighting to retain existing landlord customers rather than cede them to rivals, and this cut fits that pattern. BM Solutions did not cut across all BTL products or for new purchases.
Nationwide: up to 25bps on two, three, and five-year fixes
Nationwide reduced rates by up to 25 basis points on its two-year, three-year, and five-year fixed-rate products. As a mutual building society rather than a shareholder-owned bank, Nationwide often sets rates slightly differently from the big banks, and its willingness to cut across multiple fixed-rate terms is worth watching. As with the other lenders, the reductions are selective within each term band rather than uniform.
Why the average rate is still around 5.5%
A week of lender cuts might suggest rates are falling broadly. They are not, at least not yet, and understanding why requires a brief explanation of how mortgage pricing works.
The swap rate connection
When a bank or building society offers you a fixed-rate mortgage, it does not just lend you its depositors’ money at a rate it picks out of thin air. It hedges its interest-rate risk using instruments called interest-rate swaps. In a swap, the lender pays a fixed rate to a counterparty and receives a floating rate in return (or vice versa). The fixed rate it pays in that swap is the swap rate, and it closely tracks the yield on UK government bonds (gilts) of a similar term.
In practical terms: a two-year fixed mortgage rate is built roughly on top of the two-year sterling swap rate, plus the lender’s funding costs, plus its margin, plus any product fee offset. When swap rates rise, the raw ingredient for fixed mortgage pricing gets more expensive, and lenders either raise mortgage rates or take a margin hit. When swap rates fall, the opposite is true.
The key point is that a lender cutting its margin, while swap rates remain elevated, does not move the average market rate much. What the May cuts represent is lenders trimming their own profitability to stay competitive, not a reduction in what the market as a whole is paying for two-year money.
Where swap rates and gilt yields are right now
UK gilt yields have risen sharply since March 2026. The ten-year gilt yield, which is the most-watched benchmark for medium-term UK borrowing costs, hit 5.1% on 11 to 13 May. That is the highest level since July 2008, in the middle of the global financial crisis. The thirty-year gilt briefly touched 5.81%, a level not seen since 1998.
For context: when the average two-year fixed mortgage rate was 4.84% in early March, gilt yields were considerably lower. The subsequent rise in yields explains most of the 94-basis-point increase in average mortgage rates since then. The Uswitch live tracker put the average two-year fix at around 5.78% at the mid-May peak; it has since eased to around 5.5%, and a further sharp fall is unlikely until gilt yields come down.
Swap rates move closely with gilt yields rather than with the Bank of England base rate. This is a frequent source of confusion: people see the base rate at 3.75% and wonder why mortgage rates are double that. The base rate governs overnight lending between banks; it does not directly set the multi-year borrowing costs that determine fixed mortgage rates. What matters for fixed rates is the multi-year gilt yield, and that has been rising.
The political backdrop driving gilt yields
Gilt yields do not rise in a vacuum. The spike to multi-decade highs in mid-May 2026 had a specific trigger: acute uncertainty about the future of the UK government.
Following local-election losses in early May, more than 70 Labour MPs publicly called for Keir Starmer to resign as Prime Minister. The calls came from a broad cross-section of the parliamentary party, not just the usual critics, and financial markets took notice. Bloomberg reported on 12 May that gilts were selling off with the Prime Minister under visible pressure, and CNBC reported the same day that UK government borrowing costs were rising as political uncertainty intensified.
The market’s concern is not really about who is Prime Minister in human terms; it is about what a leadership change signals for fiscal stability and policy continuity. Markets price government bonds based partly on their confidence that a government will manage debt sustainably and predictably. Sudden political upheaval, of the kind that forces a mid-term leadership contest, raises the risk premium that investors demand to hold that government’s debt. Higher risk premium means higher yields.
Pantheon Macroeconomics, a widely-cited UK economic research firm, put a specific number on this. Their estimate: replacing the Prime Minister could add approximately 45 basis points to ten-year UK borrowing costs. That is not a certainty and not a precise forecast of what would happen, but it gives a sense of the order of magnitude markets are considering. ShareScope’s bi-weekly commentary for 13 May noted that gilt market signals were pointing to a sustained period of elevated borrowing costs, with the political situation listed as a live contributing factor.
It is worth being precise about what this means and what it does not mean. Rising gilt yields following political pressure are not a verdict on the merits of any political position. They are a reflection of investor uncertainty about continuity and stability. Markets do not reward or punish particular policies as such; they price risk. Political events that increase uncertainty tend to raise the risk premium on government debt, and that feeds through to mortgage rates via the swap-rate mechanism described above.
What this means for borrowers
The picture varies considerably depending on where you are in the mortgage cycle.
Your fixed deal is ending in the next three to six months
This is the group most exposed to current conditions. If you fixed two or three years ago at rates below 3%, you are facing a significant payment increase when you remortgage. The average two-year fix, now around 5.5%, remains well above the sub-3% rates many borrowers fixed at in 2022 to 2024.
The practical options are the same as they have always been: fix again, move to a tracker that follows the base rate, or stay on the standard variable rate (which is almost always the most expensive option). Many lenders allow you to lock in a rate up to six months before your deal ends, which means you can act now on current pricing rather than waiting to see if rates move before your deal expires. Whether to lock in now, wait, or speak to a broker about your specific situation is a decision only you can make with full knowledge of your own finances.
You are a first-time buyer looking now
The Halifax cuts specifically included first-time buyer products, which is a signal that lenders want this segment of the market. Affordability has tightened significantly from the rate lows of 2020 to 2021, but the cuts this week mean that the best-buy first-time buyer rates are slightly more competitive than they were last week. Comparing across lenders, and factoring in fees (arrangement fees of £999 to £1,499 are common), is worthwhile. A mortgage broker can compare the whole market rather than the front-of-book deals that appear in the press.
You are a buy-to-let landlord
The BM Solutions product transfer cuts are specifically relevant here. If you are new to the landlord market, our property investment for beginners guide covers the fundamentals alongside the rate environment. Landlords on existing BM Solutions products who are coming up for renewal are in a better position today than they were a fortnight ago, albeit only marginally. The BTL market has additional complications from tax changes and stress-test affordability rules that do not apply to residential mortgages; the rate environment is just one variable among several.
You are considering a second-charge mortgage
Second-charge mortgages (secured loans taken against a property you already own) are priced differently from first-charge products and are not directly affected by the same week-to-week lender rate movements. They tend to carry a higher rate than first-charge mortgages and their pricing is influenced by the broader secured-lending market. If you are weighing a second charge against remortgaging, comparing the total cost across both options in full is the right starting point.
What this means for savers
The conventional wisdom is that when mortgage rates fall, savings rates follow. That is a reasonable rule of thumb in a normal rate cycle. But the current situation is not straightforwardly normal, and it is worth thinking about what elevated gilt yields mean for savers.
Savings rates have been higher over the past two years than at any point in roughly fifteen years. Easy-access rates above 4.5%, fixed-term cash ISA rates above 4.8%, and premium bonds prizes linked to a prize fund rate of 4.4% (as of mid-2026) have given cautious savers returns they have not seen since before the 2008 financial crisis. The question is how long that lasts.
The answer depends on what happens to gilt yields and the Bank of England base rate. If gilt yields remain elevated because of sustained political or fiscal uncertainty in the UK, then the interest rate environment stays higher for longer across the board, including for savers. The Bank of England held the base rate at 3.75% on 30 April by an 8 to 1 vote, the single dissenting member voting for a further cut, and Bank Rate has stayed at 3.75% through every meeting since. The next Monetary Policy Committee decision is Thursday 17 September 2026.
If the political situation stabilises and gilt yields retreat from their current highs, you would expect some pass-through to lower savings rates over time. Best-buy savings accounts tend to reprice within weeks of a base rate change, and some fixed-term bonds reprice even faster if market expectations shift. Savers who want to lock in current rates for a year or two before a potential cut cycle accelerates may find fixed-term accounts or cash ISAs worth looking at now, before a rate reduction changes the available options.
None of this is to say that savings rates are definitely about to fall. It is simply to note that the rate-cut narrative for mortgages does not automatically translate into lower savings rates in the near term, and the current gilt-yield environment may actually support savings rates staying elevated for longer than markets were pricing a few months ago.
FAQ
When will mortgage rates actually fall significantly?
No one can say with certainty. Mortgage rates are built primarily on swap rates, which track gilt yields. For rates to fall materially, gilt yields need to come down, and that requires either a significant easing of inflationary pressure, a reduction in fiscal risk, or a change in the political and market backdrop that is currently pushing yields up. The Bank of England base rate at 3.75% is already below recent highs, but that alone is not enough if gilt yields remain elevated. Watching the ten-year gilt yield, rather than waiting for base rate announcements, gives a better real-time signal of where fixed mortgage rates are heading.
Should I fix now or wait?
This is a personal decision that depends on your specific circumstances, including how much you owe, when your current deal ends, your income stability, and your appetite for rate risk. Savvy Investor Guide does not give personal financial advice, and neither does this article. What we can say is that the factors pointing toward fixing sooner include elevated gilt yields that may not fall quickly, the option to lock in a rate up to six months before your deal ends, and the risk that if gilt yields rise further, current rates could look attractive in hindsight. The factors pointing toward waiting include the possibility that political uncertainty resolves, yields fall, and rates come down before your deal expires. A qualified, FCA-authorised mortgage broker can model both scenarios against your actual numbers.
What is a swap rate, and why does it matter for mortgages?
An interest-rate swap is a financial contract where two parties exchange interest payments: typically one pays a fixed rate and the other pays a floating rate. Banks and building societies use swaps to hedge the interest-rate risk they take on when offering fixed-rate mortgages. The fixed rate they pay in those swap contracts (the swap rate) closely tracks gilt yields of a similar term. When swap rates rise, the cost of funding a fixed-rate mortgage goes up, and lenders generally pass that cost on in the form of higher mortgage rates. The swap rate is not published in the newspaper, but you can follow UK gilt yields as a close proxy: if the ten-year gilt yield is rising, two-year and five-year mortgage rates are likely to follow.
How does the Bank of England base rate relate to mortgage rates?
The base rate directly affects variable-rate and tracker mortgages, which are priced as “base rate plus X%”. It has limited direct effect on fixed-rate mortgages. Fixed rates are determined primarily by swap rates, which track gilt yields rather than the base rate. This is why the base rate can stay at 3.75% while the average two-year fixed rate is around 5.5%: the gap reflects the market’s pricing of medium-term interest-rate risk and UK fiscal risk, not a simple markup over the base rate. When the base rate falls, it usually brings tracker and variable rates down with it, and may eventually influence swap rates and fixed rates if markets expect the cuts to be sustained, but the relationship is indirect.
What would happen to mortgage rates if the Prime Minister changed?
Markets are already pricing some degree of political uncertainty into gilt yields. Pantheon Macroeconomics estimated that a change in Prime Minister could add around 45 basis points to ten-year UK borrowing costs, above whatever the market is already pricing in. If that were to happen and gilt yields rose by that amount, swap rates and fixed mortgage rates would be expected to follow, at least in the short term, before markets reassessed the fiscal position of the incoming administration. This is not a prediction of what would happen; it is an estimate of the market’s sensitivity to that scenario based on current conditions.
How do I check when my current mortgage deal ends?
The simplest starting point is your original mortgage offer letter or your most recent annual mortgage statement, both of which will show the initial term of your fixed or discounted rate and the date it converts to your lender’s standard variable rate. If you cannot find the paperwork, call your lender’s mortgage servicing team and ask directly; they are required to provide this information. Most lenders also display your product end date in their online mortgage account portal. Once you know the date, most lenders and brokers allow you to start shopping for a new deal up to six months before that date, so you have time to compare without being rushed.
Are savings rates likely to stay high for much longer?
The elevated savings rates of 2024 to 2026 have been driven by a combination of the Bank of England base rate at historically high levels and competition between providers. If the base rate falls further and gilt yields ease, savings rates will follow, though there is usually a lag. In the current environment, where gilt yields remain elevated partly because of political uncertainty, the timeline for that repricing is harder to predict than it would be in a more stable market. Providers offering the best rates on easy-access accounts and fixed-term products can change their offers quickly when conditions change, so anyone wanting to lock in current rates for a fixed term has a finite window to do so.
Savvy Investor’s take
The week’s rate cuts are real. Lenders competing for remortgage and first-time buyer business are trimming margins, and for individual borrowers on the right product at the right LTV, those cuts translate to genuine savings. But the broader picture is that the UK mortgage market is operating in an environment where the wholesale funding costs have risen sharply since March, driven by gilt-yield dynamics that are only loosely connected to what the Bank of England decides at its quarterly meetings.
The gap between the base rate of 3.75% and the average two-year fixed rate of around 5.5% is telling you something. It is telling you that the market is pricing meaningful UK fiscal and political risk into medium-term borrowing costs. Until that risk premium eases, either because political uncertainty resolves or because the UK’s fiscal trajectory reassures bond investors, the average mortgage rate is unlikely to fall quickly, no matter how many individual lenders trim their offerings in any given week.
For borrowers, the practical implication is to watch gilt yields, not just lender announcements, as the leading indicator of where rates are heading. For savers, the implication may be the opposite of what the mortgage headlines suggest: elevated yields support higher savings rates staying in place longer than many anticipated at the start of 2026.
Information, not advice
This article is general information about how UK mortgage rates are set and the factors affecting them as of 14 May 2026. It is not personal financial advice. Savvy Investor Guide and The Savvy Investor Ltd are not authorised or regulated by the Financial Conduct Authority and are not financial advisers. Your individual mortgage or savings decisions depend on your personal circumstances. If you need personalised advice, speak to a qualified, FCA-authorised mortgage broker or independent financial adviser.
Key official sources
- Bank of England MPC summary, 30 April 2026: bankofengland.co.uk
- Uswitch UK mortgage rates today (live tracker): uswitch.com
- MPA Magazine, week ending 8 May 2026: mpamag.com
- Kael Tripton, UK mortgage rate cuts (Santander, Halifax, May 2026): kaeltripton.com
- CNBC, 12 May 2026: cnbc.com
- Bloomberg, 12 May 2026: bloomberg.com
- ShareScope bi-weekly market commentary, 13 May 2026: knowledge.sharescope.co.uk
Update history: 7 October back to 19 May 2026
Update, 7 October 2026. The average five-year fix has reached 6%. On 5 October Moneyfacts put the average five-year fix at 6%, the highest since late September 2023, and the two-year at 5.98%, its highest since mid-December 2023. At the start of September 1,494 fixed deals were priced below 5%; on 5 October there were nine. Bank Rate is unchanged at 3.75%. Sources: Moneyfacts, 5 October 2026; Mortgage Solutions, 5 October 2026. Our lender-by-lender record of the September repricing has the detail.
Update, 1 October 2026. Average fixed rates ended September close to 6%. Moneyfacts’ Rate Watch of 25 September put the average two-year fix at 5.92% and the five-year at 5.94%, and by 29 September the two-year average had edged up to 5.93%. Lenders were still repricing upwards in the last days of the month, among them Barclays, Nationwide and Virgin Money. Bank Rate is unchanged at 3.75%. Sources: Mortgage Strategy, 25 September 2026; 29 September 2026.
The cause is the one this article describes. The Bank of England’s Financial Policy Committee, in the record of its 25 September meeting, said sovereign bond yields in a number of advanced economies had risen “to levels not seen since 2008”, and that average quoted rates for fixed-rate mortgages had risen by around 40 to 60 basis points. Source: Bank of England, 30 September 2026. Our lender-by-lender record of the September repricing has the detail. The notes that follow have moved here from the top of the article and are unchanged.
Update, 18 September 2026. The Bank of England held Bank Rate at 3.75% on 17 September, by six votes to three. Megan Greene, Catherine L Mann and Huw Pill voted to raise it to 4%. The Bank said CPI inflation “increased to 3.1% in August and is likely to rise further over coming quarters”. Source: Bank of England, 17 September 2026.
Fixed rates had already moved, and the hold does not undo that. NatWest, Santander, HSBC, Lloyds Bank and TSB raised selected fixes for the second time this month, and Moneyfacts put the average two-year fix at 5.73% on 15 September, up from 4.84% at the start of March, with the five-year at 5.78%. Fixed deals are priced off swap rates, not Bank Rate, which is why they rose ahead of a decision that left Bank Rate where it was. Source: Mortgage Solutions, 15 September 2026.
Update, 5 September 2026. The direction turned on 4 September, and the headline on this article no longer describes the market. Moneyfacts reported swap rates at 30-day highs after escalating conflict between the United States and Iran, with the average two-year fixed rate now 5.6%, up from 5.59% a week earlier and the five-year up one basis point to 5.64%. Moneyfacts analyst Caitlyn Eastell said the changes “have reversed last weeks drops in average rates and it would be fair to assume that more lenders will start hiking rates in the coming weeks”. Source: Mortgage Strategy, 4 September 2026.
Two lenders have already moved, both from Monday 7 September. HSBC UK raises rates across its residential and buy-to-let ranges, without disclosing the size of the increases, and Molo raises its buy-to-let fixes the same day. Aaron Strutt of Trinity Financial said “HSBC is the first of the big lenders to announce rate hikes following the rise in borrowing costs”. Source: Mortgage Strategy, 4 September 2026.
Read the size of this move separately from its direction. The two averages moved a single basis point each, so the numbers on their own do not carry the word reversal. What changed is the funding cost sitting behind them, and the fact that a large lender has repriced upward before the averages caught up; Mortgage Strategy notes that the full effect of the swap-rate movements has yet to be priced in. This article has called a turn several times and been overtaken each time, so this box records a dated position rather than a forecast. Both averages are weekly figures and are up to a week old by construction.
Update, 20 August 2026. HSBC cut on 19 August, and the more interesting half of the move is not the rates. Cuts were modest on new purchases, between 0.03 and 0.09 percentage points, taking a five year fix at 95% loan to value to 5.24% and a five year at 90% to 4.93%. Remortgage was where the money went, with cuts of 0.12 to 0.20 points and the largest cut, 0.20 points, on the two year fix at 85% loan to value with no fee, which falls to 5.17%. That is the fourth lender move this article has logged since late July and the direction is still not uniform across the market.
The lending limits moved much further than the rates. HSBC raised its maximum loan at 85% loan to value from £2m to £3m, and at 75% loan to value from £3m to £5m. Flats are capped separately, at £1m in the 85% tier and £3m in the 75% tier. This is a different lever from a rate cut and it is worth separating: a price change competes for the same borrowers, whereas a limit change admits borrowers who previously did not qualify at that tier at all. Oli O’Donoghue of HSBC UK framed it as enhanced limits that “will open up new opportunities for our customers by increasing the properties available to them”. Source: Mortgage Introducer, 19 August 2026.
One piece of context that cuts against the cuts. July CPI landed the same morning at 2.9%, up from 2.6%. Repricing down into a rising print is not a contradiction: fixed rates are set off the swap curve weeks ahead, and lenders reprice up faster than down. So this round was priced before that number existed. Treat it as a lagging signal, not a view on where inflation goes next.
Update, 8 August 2026. A fourth move in eleven days, and this time one lender went in both directions at once. NatWest repriced on 7 August, with the changes taking effect on 10 August. New business residential fixed rates were cut by up to 22 basis points, including a two year fix at 95% loan to value falling from 5.59% to 5.38% and a five year fix at the same tier falling from 5.49% to 5.30%. At the same time it put additional borrowing rates up, with a two year fix at 60% loan to value rising 9 basis points to 4.92%. Two year trackers were cut by 10 basis points. No reason was given for the split. Source: Mortgage Solutions.
Why that matters more than another straight cut would have. Over eleven days the market has produced Nationwide cutting on 3 August, a Moneyfacts roundup on 5 August reporting many lenders repricing upward, Barclays cutting by up to 50 basis points on 6 August, and now a single lender moving both ways on the same day. That last one is the clearest evidence available that there is no market wide direction to report at the moment, only repricing product by product. The practical consequence for anyone shopping is that the comparison has to be done on your own loan to value and product type, because the headline direction will not tell you what your tier is doing.
Borrower behaviour is moving with it. Moneyfacts data published on 5 August shows 31.3% of first time buyers researching mortgages on its site looked at variable or tracker deals in July, against 9.5% in February, after the average two year fixed rate at 90% loan to value rose 65 basis points to 5.74%. Source: Mortgage Solutions.
Update, 7 August 2026. A second big lender has cut, and the week in between went the other way. 3 August: Nationwide cut by up to 0.19 percentage points, effective the next day, with Carlo Pileggi naming falling swap rates: “After a period of increasing swap rates, recent falls have created an opportunity for us to reduce mortgage rates.” 5 August: Moneyfacts’ weekly roundup reported the lowest advertised fixes unchanged but “many lenders” repricing upward, attributed to “continued volatility in the Middle East (and its impact on the UK)”. 6 August: Barclays announced cuts effective today.
The Barclays cuts are deepest at the long end: the ten-year fixed purchase falls half a point, from 5.62 to 5.12 percent at 60 percent loan-to-value and 6.03 to 5.53 at 80 percent, while two-year fixes move only 9 to 18 basis points. Jatin Patel gave the reason only as “recent market volatility”. The trade press splits on the headline, some reporting up to 0.50 percentage points and others up to 0.66; the product figures are the ones every outlet agrees on.
Read the three together rather than picking one. Two large lenders cut eight days apart, the market repriced upward in between, and three different causes were named. That is a market without a direction rather than one that has turned, and this article has called a turn twice in three weeks and been overtaken both times. The practical position is unchanged: most lenders let you lock a rate up to six months before your deal ends, and a firm offer in hand beats a view on where this goes next. Sources: Mortgage Solutions and The Intermediary on Barclays, Mortgage Solutions on Nationwide, Moneyfacts.
Update, 27 July 2026. Two things happened over the weekend, and they point in opposite directions. First, the repricing wave got wider. Since the 22 July update, NatWest has raised for a second consecutive week, and on 24 July Nationwide moved its two-year fix at 60 percent loan-to-value from 4.37 to 4.60 percent, and at 75 percent from 4.46 to 4.68 percent, with its fee-free five-year going from 4.69 to 4.87 percent. Accord raised residential fixes up to 90 percent LTV by 0.2 percentage points and buy-to-let by 0.1, TSB raised two-year residential fixes by up to 0.2 points (starting at 4.59 percent at 60 percent LTV), and Virgin Money raised residential by up to 0.23 points and buy-to-let by up to 0.15. Today, 27 July, HSBC’s second increase inside a week takes effect, covering first-time buyer and homemover, remortgage and switching, borrowing more, energy-efficient property, buy-to-let purchase and remortgage, and international deals. HSBC has not published the new rates and no trade outlet has them, so treat any specific HSBC figure quoted today with caution. Kensington also raises today, by up to 15 basis points on its 75 percent LTV buy-to-let range.
Second, and this is what changes the story: the thing that caused all of it has eased. The United States and Iran have both paused strikes, with Tehran saying it halted its retaliatory operations after Washington stopped, and the pause held through the weekend into a third day. Brent crude has fallen to about $91.70, down more than 5 percent on the day. The UK ten-year gilt, which closed at 5.03 percent on Friday, was trading a shade below 5 percent on Monday morning.
So the increases landing this week were priced off last week’s fear. That does not mean they reverse quickly. Brent is still around a quarter higher than it was a month ago, lenders reprice upward faster than they reprice down, and a reciprocal pause is not a settlement, because either side can resume. But the honest read is that the funding-cost pressure behind this wave has stopped building for now rather than continuing to intensify. The practical position from the earlier updates is unchanged: most lenders let you lock a rate up to six months before your current deal ends, and a firm offer in hand is worth more than a forecast. One date worth knowing: the FCA’s mortgage rule review consultation (CP26/18) closes tomorrow, 28 July.
Update, 22 July 2026. The repricing up has continued. A second wave inside a week landed on 20 and 21 July: Halifax raised fixed rates by up to 0.20 percentage points and trackers by 0.10, BM Solutions by up to 0.19, and HSBC, Skipton Building Society and Barclays all moved rates up across their ranges, with Skipton pulling its old rates at 9pm on 20 July. The driver is the same as last week: two-year sterling swaps have climbed from about 3.98 percent a month ago to about 4.18 percent, and five-year swaps from about 4.01 to 4.23 percent, as the Middle East conflict keeps pushing lenders’ funding costs up. As a rough rule of thumb, a 0.2 point rise adds about £23 a month to a £200,000 repayment mortgage. This morning’s better inflation news (June CPI at 2.6 percent, down from 2.8) has not turned this around, because fixed rates price off swaps and forward oil risk, not last month’s index. One date worth knowing: the FCA’s mortgage rule review consultation (CP26/18), which proposes widening access to interest-only, retirement interest-only and irregular-income lending, closes on 28 July. The framing from the earlier updates holds: most lenders let you lock a rate up to six months before your current deal ends, and a firm offer in hand beats waiting on a market that is moving both ways in the same week.
Update, 17 July 2026. The price war has turned two-way. Several big lenders are now repricing upward: Nationwide raised fixed and tracker rates by up to 0.35 percent and Virgin Money by up to 35 basis points from 16 July, Coventry Building Society followed, and NatWest joined on 17 July with increases of up to 27 basis points. The driver is the Middle East: renewed conflict has pushed swap rates back up (the two-year sterling swap is back above 4.1 percent), and lenders price fixed mortgages off swaps, not the base rate. L&C’s David Hollingworth put it plainly: “The resumption of hostility in the Middle East has caused further uncertainty in financial markets, as the threat of higher interest rates returns. That’s affecting lenders’ funding costs.” This is not a clean reversal, though. Halifax, BM Solutions and Nottingham Building Society were still cutting in the same 48 hours, so the honest read is a mixed and volatile market rather than a wholesale move up. The point from the earlier updates holds: if the maths on your specific offer works today, and most lenders let you lock a rate up to six months before your deal ends, acting on a firm offer carries less risk than waiting for a market moving in both directions at once.
Update, 10 July 2026. The mortgage price war has broadened. After the six-lender round on 7 July, more lenders cut on 8 and 9 July, including Barclays (by up to 66 basis points), UTB (up to 100 basis points on residential ranges) and Pepper Money, with Accord, Coventry Building Society and Foundation cutting buy-to-let rates. The driver is funding costs: SONIA swap rates have slipped below 4 percent (the two-year swap around 3.91 percent, the five-year around 4.00 percent). Whole-of-market averages sit around 5.5 percent (Moneyfacts: two-year fix 5.51 percent, five-year 5.50 percent), with the best big-six deals nearer 4.6 percent at 75 percent loan-to-value. One divergence worth watching: these cuts track swap rates, not the ten-year gilt, which has risen to about 4.95 percent on the oil-price and fiscal picture, so the rising long gilt is not, for now, capping the price war.
Update, 2 July 2026. This piece analyses the mortgage cuts of the week of 7 to 13 May 2026. Since then rates have eased rather than risen: the average two-year fix is now around 5.5% (Moneyfacts, late June) and 5.24% at 75% loan-to-value on Uswitch’s 2 July figures, with the best trackers and fixes starting from around 4%. The Bank of England has held Bank Rate at 3.75% since 18 June 2026. The gilt and swap mechanics explained below still drive mortgage pricing; the direction of travel since late spring has been gently downward.
Update, 3 June 2026: The cyclical relief that drove the 26 May gilt close to 4.86% has narrowed sharply this week. Talks between Washington and Tehran were formally suspended on 1 June over Israeli strikes in Lebanon, and on 2-3 June the United States and Iran exchanged strikes: US Central Command struck an Iranian military ground control station on Qeshm Island in the Strait of Hormuz, in response to Iranian strikes on Kuwait and Bahrain that failed to hit their targets. Iran’s Revolutionary Guard said it had targeted the headquarters of the US Navy’s 5th Fleet in Bahrain. Brent crude is back near $97 per barrel, a third consecutive session of gains, up from Friday’s $92.05 close. The 10-year gilt sits at roughly 4.85% at the start of June, broadly unchanged on the level but with swap rates up overnight in response to the Hormuz escalation. Andrew Bailey, speaking on 29 May, said the Bank “is in no rush to raise interest rates while the outcome of the Iran war remains uncertain”; the framing is dovish on its face, but the practical effect for borrowers is the same as a hawkish one in that rate cuts are not being signalled in the near term. Lenders had continued to cut fixed mortgage rates through late May (NatWest, Barclays, TSB, Santander all trimming further); that cut cycle may now slow or partially reverse if swap rates stay elevated. The window for cuts to deepen further looks narrower this week than it did last week. Practical takeaway: if the maths on your specific offer works today, the “lock it” framing from the 27 May and 22 May updates below still holds. Sources: India TV, 3 June 2026; Euronews, 3 June 2026; Trading Economics, Brent crude live tick.
Update, 27 May 2026: The UK 10-year gilt closed Tuesday 26 May at 4.86%, the lowest level since 21 April and the sharpest weekly decline since 2024. Two drivers: weak UK macro trimming Bank of England rate-hike bets, and Middle East ceasefire diplomacy easing the energy-shock premium in oil. The mortgage implication is narrow but real: lenders that re-tariffed at 60 to 75% LTV during last week’s gilt spike (Santander, NatWest, Nationwide) now have a small competitive window to ease back. If five-year swaps hold below 4.10%, expect another round of selective cuts at the lower LTV tiers. Don’t read this as “rates are going to keep falling”. The Bank of England’s 18 June MPC remains unresolved, JP Morgan still prices one hike, and the US side of the same story (30-year Treasury near 5.08% Friday close, Warsh-led FOMC also 16-17 June) is moving in the opposite direction. The practical advice is unchanged from the 22 May update below: if the maths on your specific offer works today, lock it.
Earlier updates
- 22 May 2026: Another cut wave landed: Santander cut first-time-buyer, homemover and remortgage fixes by 23 to 25 bp and repositioned up the LTV stack, NatWest nudged some 90% LTV rates up, and Barclays and Darlington also re-tariffed; the 10-year gilt eased to about 4.95%.
- 19 May 2026: A third straight week of cuts (Nationwide by up to 36 bp, NatWest’s 2-year at 4.49% and 5-year at 4.67%, The Mortgage Lender on buy-to-let, West Brom’s 90% LTV to 5.08%), but with the 10-year at 5.16% and the 30-year near 5.82%, the cuts reflected margin compression rather than cheaper funding.