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  • Mal McCallion

Mortgage Price War Ignites as Big Lenders Slash Rates

Updated: Dec 11, 2023

NatWest and Virgin Money join the mortgage 'price war', slashing rates on fixed deals, following similar moves by four other UK lenders.

Hear that? It's the sound of a mortgage 'price war' heating up as NatWest and Virgin Money join the fray, slashing rates on their fixed mortgage deals. This move comes hot on the heels of four other major UK home loan providers, including Halifax, HSBC, Nationwide, Sanander and TSB, who have also cut the cost of their new fixed-rate deals.

NatWest has announced a rate cut of up to 0.65 percentage points on its house purchase and remortgage fixed home loans, effective from Friday. This means a five-year fixed rate for homebuyers with a 10% deposit, currently at 6.64%, will be offered at a rate of 5.99%. Other NatWest deals, including buy-to-let and shared equity mortgages, will also see rate reductions.

Not to be outdone, Virgin Money has announced a range of cheaper remortgage deals for those wanting to fix their monthly payments. However, these deals are only available for seven days, until 17 August, leading brokers to dub it a "flash sale".

Industry insiders suggest that a drop in housing transaction volumes has left lenders feeling the heat, sparking this competitive rate slashing. Lewis Shaw, founder of broker Shaw Financial Services, describes this as the "light at the end of the tunnel" after months of mortgage rate rises.

The current climate suggests we're in the thick of a mortgage market price war. This not only benefits residential borrowers but also provides a silver lining for buy-to-let landlords who may have felt sidelined recently.

Mortgage rates have been on the rise as the Bank of England has increased interest rates in an attempt to curb inflation. With the base rate now at 5.25% after the 14th consecutive rise last week, these unexpected rate cuts by major lenders are a welcome surprise for borrowers.

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