Banks and building societies have begun offering much cheaper fixed rates and larger mortgage loan sizes over the last few weeks. And now the Bank of England has reduced the base rate to 3.75%, this trend is likely to hold.
Banks and building societies have begun offering much cheaper fixed rates and larger mortgage loan sizes over the last few weeks. And now the Bank of England has reduced the base rate to 3.75%, this trend is likely to hold.
We asked our friends at Trinity Financial for some advice on finding the right mortgage deal.
What’s been happening with mortgage rates?
We’ve seen a mortgage price war heating up, with fixed rates starting at 3.51%.
With the property market slowing in the run-up to the budget, lenders have been pushing through more changes to attract a broader range of borrowers. This has been made easier by amendments to mortgage affordability regulations.
Santander for Intermediaries has launched a two-year fixed rate priced at 3.51% for borrowers with a 40% deposit looking to purchase a property. The rate has a £1,999 arrangement fee, and is available for £500,000+ mortgages. NatWest, Barclays, and Nationwide for Intermediaries have also reduced their fixed-rate prices.
Also, we’ve seen income stretch mortgages as lenders ease affordability calculations.
HSBC for Intermediaries surprised the market by offering borrowers earning over £100,000 up to 6.5 times single or joint salaries at their standard, cheap fixed rates. Barclays has also started offering up to six times your salary mortgages for its Premier current account holders, which means you need to earn over £75,000 to qualify. Teachers Building Society recently went one step further, offering those in education-related jobs up to seven times their salary. Halifax's First Time Buyer Boost scheme has also been improved, so borrowers need to earn less to qualify, and the self-employed can now access it.
How will the Bank of England’s base rate cut affect mortgages?
Many of the mortgage lenders have already “priced in” this Bank of England base rate cut to their current fixed rates, so it is unlikely to make a huge amount of difference to fixed deals. Although the base rate coming down does give a signal that mortgage pricing is probably on a downward trend now, and we suspect fixes will continue to get cheaper over the coming months. Tracker rate mortgages look much better value suddenly, especially with the best deals priced around 0.10% over the 3.75% base rate.
Should you take a two, three or five-year fixed mortgage rate?
Most borrowers are still opting for two-year fixes because they expect rates to become more competitively priced in the near term and because these deals are typically the cheapest. Santander for Intermediaries is offering a selection of the lowest rates. Its two-year rates start from 3.51%, three-year fixes from 3.60%, and five-year rates from 3.76%. Three-year fixes offer a bit more financial stability, while five-year deals cater to the more risk-averse. Tracker mortgages are more expensive, but they often have no early repayment charges, which suits those unsure whether they want to move home soon.
Is the ‘mansion tax’ going to hit mortgage affordability?
There has been extensive press coverage of the new 'mansion tax' and the costs it will entail. Still, when it comes to affordability and securing a mortgage of over £2 million, it is unlikely to make much difference. Lots of banks and building societies still offer cheap £2 million+ loans, and to qualify, income and expenditure are assessed. Coutts, the private bank, recently increased its minimum loan size from £1 million to £1.5 million, and Investec has some competitively priced mortgages.
Are there more solo property buyers?
Yes, the number of first-time buyers buying solo is on the rise, driven by improved mortgage affordability rules, a major bank has said. According to Santander UK figures, there was a 13.4% increase in sole borrower first-time buyer mortgage applications received by the bank between June and October compared to the prior period.
The growth for joint first-time buyers was around 13.1%, the first time that solo buyers have outstripped joint buyers in five years. The bank added that August saw the second-highest volume of individual applicants this year, at 53%, following its loan-to-income changes. Santander's figures also show that women made up around 48% of first-time individual buyers in 2025. This has been steadily growing since 2015, when the proportion of female first-time buyers came to 42%.
How much of a deposit do first-time buyers typically have?
Data in the latest English Home Survey showed that 59% of first-time buyers paid a deposit of less than 20% of the purchase price of their home, and within this, 16% paid a deposit between 1% and 9%. While 43% put down between 10% and 19%, just 8% of first-time buyers bought their home outright in 2024-25.
The majority – 86% – bought their first home using savings, while 31% said they were helped by family or friends. Some 6% of new homeowners used an inheritance for their deposit. The average (mean) deposit of a first-time buyer in 2024-25 was £78,131 (£36,500 median). Given this, it was not surprising that the majority of first-time buyers were in the top two income quintiles.
How long does it take to get a mortgage offer?
Lenders are also issuing faster mortgage offers, with the average time to produce a mortgage offer through their intermediary lending departments, such as the ones Trinity Financial’s brokers have access to, taking as little as four working days through Santander, five working days through Halifax, and eight working days through Nationwide.
Contact Trinity Financial
At Trinity 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].
