Mortgage Update: Rates Still Start From 3.51%

Even though many banks and building societies have increased the price of their fixed rates over the last two weeks, the most competitive mortgages are still available from 3.51%. HSBC and Barclays are the latest big lenders to increase the cost of their fixed-rate mortgages by around 0.1%, while Nationwide and NatWest have also raised some of their fixes by around 0.2%.

Santander is still offering some of the most competitively priced mortgages, although its rates are likely to rise in the coming days. The bank's 3.51% two-year fix is available to borrowers moving home with a 40% deposit, and the maximum loan size is £2 million. There is a £1,999 arrangement fee and the overall cost for comparison is 6.3% APRC representative. Santander's current three-year fixes are priced at around 3.7%, and its five-year fixes at around 3.75%.

The money markets seem to be pricing in a further Bank of England base rate cut in April, so I suspect even though rates are going up a bit now, they will come back down again. The lenders have a huge appetite to issue more mortgages this year and know they need decent rates. They also need more lenient acceptance criteria, meaning potential borrowers do not need such large deposits.

Santander launches 2% deposit mortgage, targeting first-time buyers

Santander has launched its lowest deposit mortgage for new customers, probably since the financial crash. The ‘My First Mortgage’ scheme enables borrowers with a 2% deposit or a minimum deposit of £10,000 to buy a property.

‘My First Mortgage’ is available exclusively to first-time buyers, and marks Santander’s latest step towards helping more would-be buyers onto the property ladder.

Data from the lender shows that more than half (52%) of UK adults said they found saving money for a deposit the biggest barrier to buying a property.

Key acceptance rules for the 'My First Mortgage' scheme

First-time buyer only, including joint mortgages
Maximum 98% loan-to-value (2% deposit)
Minimum deposit £10,000
Maximum mortgage £500,000
Maximum mortgage term 40 years
Capital repayment only, not interest only
Must be on a 5-year fixed rate and early repayment charges apply
Gifted deposits accepted
No flats, new build or properties in Northern Ireland

NatWest is the latest big bank to offer up to six times salary mortgages

NatWest has made changes to its residential loan-to-income (LTI) calculations to enable many homebuyers and remortgaging customers to access larger mortgage loan sizes.

Anyone applying for a NatWest mortgage earning over £75,000 or £100,000 jointly will now be able to access up to 6.0x income, up from 5.5x, provided they have a deposit of at least 25% and a good credit score.

For single or joint applicants earning over £40,000, NatWest's income multiple is also being raised to 5.5x times salary from 5.0x – again, they need a deposit of at least 25% of the property value.

Other lenders offering income-stretch mortgages of up to six times salary include Barclays, Nationwide, and the Bank of Ireland. HSBC recently started offering up to 6.5x salary to higher earners.

Is it a good time to get a mortgage?

Yes! Mortgage lenders are offering many of the most competitively priced rates around for some time. They also have some generous acceptance criteria.

It is fair to say the mortgage market has not been this good with so much competition to attract borrowers, with a range of incomes and deposits, for a while.

With 1.8 million fixed-rate mortgages coming to an end this year, more homeowners will look to refinance to get the most competitively priced rates. They are also going to borrow more for home improvements.

Four in 10 buy-to-let landlords plan to refinance in 2026

Almost four in 10 landlords plan to refinance their buy-to-let properties during the next 12 months, Paragon Bank research shows.

The figures, which cover Q4 2025, found that 39% of landlords intend to refinance throughout 2026, a figure that increases in line with portfolio size.

Over half (53%) of those with four or more buy-to-let mortgages anticipate either remortgaging or switching to a new product with their existing lender, falling to 27% of those with between one and three properties.

Industry figures from UK Finance show that £49.7 billion worth of fixed-rate buy-to-let mortgages are set to mature in the 12 months to November, predominantly fuelled by the high number of five-year fixed-rate mortgages taken out during a bumper year for the buy-to-let market in 2021.

This survey was taken from 800 landlords and carried out by Pegasus Insight on behalf of Paragon Bank.

What has been happening to buy-to-let mortgage rates recently?

Mortgage lenders have been lowering their buy-to-let rates, so in some cases, they are cheaper than residential fixed rates. Some buy-to-let lenders offer rates close to 2% with really high setup fees, rates around 3.5% with more manageable setup fees, and 4% fixes with flat £1,499 or £1,999 arrangement fees.