Competition in mortgage market ramps up as lenders unveil new rates

Competition between mortgage lenders is ramping up after Lloyds and Halifax launched some new rates on selected products.

The lenders, which are part of the same banking group, said they are seeing strong demand in the market and the changes made to some direct products will help to give customers more choice.

The revamped ranges include a two-year fixed-rate mortgage at 3.77% for Club Lloyds customers looking to remortgage. A deposit of more than 40% is needed and a £999 product fee will apply.

For Halifax remortgage customers, the bank has launched a three-year fixed-rate deal at 3.92% with a £999 product fee, for borrowers with a deposit of more than 40%.

Nationwide Building Society has also cut the mortgage rates it is offering by up to 0.25 percentage points from Wednesday.

The society’s rate reductions have been made on two, three, five and 10-year fixed-rate products.

Nationwide’s new deals include a two-year fixed-rate home mover mortgage for borrowers with a 40% deposit, with a rate of 3.64%, reduced by 0.16 percentage points. The mortgage has a £1,499 fee.

Meanwhile, The Mortgage Works, which is part of Nationwide Building Society, said it is reducing selected buy-to-let mortgage rates by up to 0.30 percentage points from Thursday.

The new deals will include a buy-to-let two-year fixed-rate at 4.09%, reduced by 0.10 percentage points, with £1,495 fee, available for borrowers with a 25% deposit.

The Bank of England is due to announce its latest base rate decision on Thursday.

Some lenders may also have end-of-year targets to meet as they look to keep rates competitive.

Moneyfactscompare.co.uk said earlier this week that average mortgage rates dipped back below 5% in November after rising above that point last month.

The website said that before September 2025, the average mortgage rate had not dipped below 5% since September 2022.

HSBC UK announced on Monday that it had introduced a new maximum mortgage loan-to-income (LTI) ratio of up to 6.5 times annual income for its Premier customers.

To qualify for HSBC Premier, customers must have an annual income of at least £100,000 paid into an HSBC Premier account, or hold £100,000 or more in savings or investments with the bank.

Many lenders have recently been making changes to enable some people to take out bigger mortgages, following moves from regulators.

Financial Conduct Authority chief executive Nikhil Rathi said in a speech on Tuesday: “Lenders have told us that they can now lend around £30,000 more to the average borrower as a result of our changes to mortgage affordability rules.

“We judged this a risk worth taking, allowing more people the security that comes with home ownership.”