Banks and building societies are working harder than usual to make it easier to secure competitively priced mortgages and larger loan amounts.
Banks and building societies are working harder than usual to make it easier to secure competitively priced mortgages and larger loan amounts.
Fixed rates have continued to improve over the last few weeks, and there are now at least twelve lenders offering mortgages with rates below 4%. The majority of these mortgages are available to borrowers purchasing a property or moving home and opting for two- or three-year fixes. There are some sub-4% five-year fixed-rate mortgages available, but the shorter-term fixes are generally undercutting the longer-term deals.
Nationwide for Intermediaries, HSBC, and NatWest are the latest major banks to lower their rates again, with NatWest now offering two- and five-year fixes below 3.90% for borrowers with a 40% deposit. Fixed mortgages are surprisingly not much more expensive if you have a 20% or 25% deposit. Click here to view our large mortgage loan best buy table.
The lenders are keen to target first-time buyers (FTBs) in particular, as they made up a record 55.75% of all home purchase transactions in Q1 2025, up from 49.78% in 2017. Final figures from UK Finance for 2024 support the trend, with 333,046 FTB purchases recorded, a rise of nearly 16% from 2023, contributing to a total of 1.1 million transactions. According to reports from the Yorkshire Building Society, based on CACI data.
Lender's ease stress test calculations
It has been a busy few days with NatWest announcing that it has eased its mortgage affordability stress rates for all mortgage customers. It stated that the changes to the stress rates mean a typical family can borrow up to £33,000 more when applying for a mortgage, but the bank would still “guard against future interest rate rises.”
HSBC, Santander, and Halifax have all recently revised their stress rates to boost borrowing power, following the Financial Conduct Authority’s call last month for lenders to design their affordability rates to best meet their customers’ needs, in a market where interest rates are declining.
HSBC simplified the stress test calculations used to determine how much applicants can borrow for a mortgage, allowing some first-time buyers to borrow up to £39,000 more. This is part of a move that HSBC says could enable 20,000 more customers to obtain one of its mortgages, alongside the ability to borrow larger amounts. Halifax, the UK's largest lender, says typical customers may be able to borrow approximately 13% more.
NatWest has launched a 'Family-Backed' mortgage deal, which enables eligible customers to apply for a mortgage with the support of a family member or friend. With the Family-Backed mortgage, if a borrower’s salary were combined with a family member or friend’s salary of £45,000, this would increase the borrowing potential to around £246,000, upping the property budget to £273,000. It is worth noting that a friend or family member would be listed on the mortgage, and their borrowing power would be reduced if they were to apply for a mortgage in the future.
April Mortgages has been in the press over the last week after announcing it will provide up to seven times income mortgages when borrowers opt for one of its longer-term fixed mortgages. Most lenders provide between four- and 5.5-times salary. My comments were printed in The Telegraph suggesting the mortgage “pushes the limits of sensible borrowing.”
Faster mortgage offers
If you are looking for a mortgage lender to issue a fast mortgage offer, then M-Powered might be the lender for you. M-Powered has rebranded, claiming to have built the "Home of the One-Day Mortgage" system, which states that it makes 96% of lending decisions within 24 hours once it receives all the required supporting documents.
Trinity Financial's brokers regularly inform surprised and delighted clients that their mortgage offer has been prepared in a single day. However, these offers often come from the same lenders, such as Barclays for Intermediaries and Nationwide for Intermediaries. It typically takes around two weeks to receive a mortgage offer, depending on the complexity of the application.
Contact Trinity Financial
At Trinty Financial, we help all types of borrowers, from first-time and next-time buyers to business owners and international clients seeking £1 million+ mortgages. Book a mortgage consultation by calling 020 7267 9399 or emailing [email protected]
