Mortgage Rate Cuts

Halifax sign outside a high street branch
Author: Samuel Beckingham
Updated: Aug 16, 2023
4 minutes read

Several banks and building societies have all started to reduce their mortgage rates in a bid to drive up demand in the housing market. Halifax has reduced rates by 0.71% for five year fixed mortgages to 5.28%. Two year fixed rates are down by 0.27% at 6.18%. Across all their products, mortgages have been reduced, including for first time buyers and new builds.

In a similar move, NatWest has cut its five year fixed rate mortgage by 0.65% for new customers and Nationwide decreased fixed rate mortgages by up to 0.55%. HSBC was less generous, with cuts from 0.05% and 0.35%, but other banks followed suit by reducing rates, with Santander reducing theirs on Monday.

Following news of the Bank Rate being increased to 5.25%, banks have started to slightly lower their mortgage rates to help drive demand again and stabilise the housing market. As the interest rate has been steadily going up since last year, the slowing down of these increases could signal the peak of these rises.

The ONS announces the latest Consumer Price Index figures today and it’s hoped that they will offer something more hopeful for the rest of the year. Lenders have been cutting rates in anticipation that the percentages will be more appealing and inflation is on its way down. While homeowners will still be facing affordability challenges, there should start to be more confidence in the market.

Some analysts believe that mortgage lenders have been shaken by the reduction in sales with these persistent Bank Rate increases. As such, lenders across the board are starting to drive up more demand and become competitive. Consumers have been told to look for better deals and not to expect their bank to hand them the best rate on the market.

If homeowners need to remortgage soon, it might be worth waiting to see how banks react to the inflation news published today. The more positive the data, the more consumers can expect to see banks fighting the market for lower mortgage rates and deals.

The best current market rates can be seen below.


  • Five year fixed rate at 5.28% (down 0.71%)

  • Two year fixed rate at 6.18% (down 0.27%)


  • Five year fixed rate at 5.63% (down 0.65%)

  • Two year fixed rate at 6.16% (down 0.37%)

First Direct

  • Ten year fixed rate at 5.19%

  • Five year fixed rate at 5.49%

  • Two year fixed rate at 5.99%


  • Five year fixed rate at 5.49%

  • Two year fixed rate at 6.09%


  • Five year fixed rate at 5.44%

As inflation has been falling already, banks have started to have more confidence in lending money to borrowers at cheaper prices. Mortgage rates have already increased significantly over the last year as banks have pre-empted how the Bank of England will move. Now that lenders are reducing their deals, it’s hoped that the signs point to inflation on a downward trend.

Typically, cheaper mortgage rate deals tend to be reserved for existing homeowners or ones looking to remortgage. This is because they usually have more equity or bigger deposits, at around 40% of a property’s value. Independent mortgage advisors are always useful in helping choose the right deal for you. If you are coming towards the end of your current mortgage period, it’s worth talking to an advisor to see how much you may be able to save with a remortgage.

If you are struggling to pay your mortgage, you should talk to your mortgagor to see how they might be able to help you. This could include increasing the length of your mortgage or allowing you to pay off the interest only for a while.