Mortgage rates today: Barclays and NatWest cut fixed deals, fresh competition targets first‑time buyers

Two of the UK’s biggest banks have lowered headline fixed mortgage rates, extending a recent run of price reductions that is putting better deals within reach of borrowers with smaller deposits. The moves arrive after several other lenders reduced costs on high loan‑to‑value (LTV) products, intensifying competition in the market.

Which deals changed and by how much

Barclays has reduced its two‑year residential purchase fixed rate at 95% LTV (zero product fee) from 4. 92% to 4. 60%. NatWest has trimmed a zero product fee two‑year fixed purchase mortgage at 95% LTV from 4. 81% to 4. 69%. NatWest has also cut a two‑year fixed remortgage at 90% LTV with a £995 product fee, taking the rate down to 4. 52% from 4. 60%.

Those changes follow earlier reductions by other lenders: one major institution cut a series of products last week by up to 0. 16 percentage points, dropping its best two‑year rate to 3. 54% for borrowers with large deposits. Another provider announced sharper reductions this week on deals targeted at first‑time buyers, with cuts as large as 0. 32 percentage points across 85% to 95% LTV bands.

Why rates are moving down now

Market indicators used by lenders have been shifting lower in recent weeks. Swap rates for two‑ and five‑year maturities have eased, which reduces the wholesale cost of offering fixed‑rate mortgages. That movement, combined with softer employment data and lacklustre growth figures, has led markets to increasingly price in an eventual base rate cut.

Rohit Kohli, director at The Mortgage Stop in Romsey, said these dynamics are encouraging lenders to compete for demand, and that first‑time buyers are noticeably more active than a year ago. "Two and five‑year swap rates have been sliding, with the two‑year swap close to its lowest point in the past couple of years, " he said. "Markets are increasingly pricing in a base rate cut, helped by softer employment data and frankly pathetic growth figures. First‑time buyers are far more active than they were 12 to 18 months ago. By trimming rates at 90% and 95% LTV, NatWest is backing borrowers with smaller deposits, not just those sitting on equity. "

What borrowers should consider next

For prospective buyers and remortgagors the immediate picture is encouraging, particularly for those needing high‑LTV products. However, headline rates tell only part of the story. Fees, cashback, early repayment charges, and the length of the fixed period all affect the overall cost and flexibility of a deal.

Practical steps for borrowers:

• Shop beyond the headline rate: compare overall cost, including product fees and arrangement charges.
• Check eligibility for high‑LTV deals: some products have stricter affordability tests even when the rate looks competitive.
• Consider timing: if you are close to the end of a fixed term, start exploring options now to avoid rolling onto a lender’s standard variable rate.
• Speak to a mortgage broker or adviser to access a broader range of products and to understand switching costs and early repayment penalties.

The latest round of cuts suggests lenders are prepared to chase market share by targeting first‑time buyers and borrowers with smaller deposits, but the market remains sensitive to macroeconomic signals. Continued easing in swap rates or clearer signs of policy loosening could prompt further reductions, while unexpected economic shocks would likely reverse the trend.

For borrowers, the takeaway is clear: improved deals are available now, but careful comparison and professional guidance will be key to securing the most suitable outcome.