In a notable turn for the UK housing market, several major lenders are igniting a mortgage price war, cutting rates and loosening borrowing rules to attract new customers. With economic uncertainty swirling around global trade developments, this shift marks the most significant change in mortgage accessibility since the 2008 financial crisis.
Big Banks Slash Rates
HSBC and the Co-operative Bank are leading the charge with fresh mortgage rate cuts across various fixed-rate products. HSBC has announced a wide range of rate reductions effective from April 16th, while the Co-operative Bank is relaunching both its standard and buy-to-let mortgage ranges on April 17th, with rate drops of up to 0.26 percentage points on certain homebuyer deals.
They’re not alone. Gen H and Barclays have also entered the fray, with Barclays being the first of the “big six” lenders to drop fixed-rate mortgage offerings below 4% a psychological milestone that could push competitors to follow suit.
Relaxed Affordability Checks Could Boost Borrowing Power
It’s not just about lower interest rates. Lloyds Bank, Halifax, Bank of Scotland, and BM Solutions all part of the Lloyds Banking Group have relaxed their affordability stress tests. This could significantly increase how much buyers can borrow.
Previously, a household earning £75,000 with two children might have been able to borrow around £286,000. With the new changes, they could potentially borrow up to £324,000 a jump of more than £38,000, or roughly 13%.
This shift follows a warning from the Financial Conduct Authority (FCA), which noted that outdated stress test calculations were potentially locking qualified borrowers out of the market.
First-Time Buyers Get a Boost
Perhaps the biggest winners in all of this are first-time buyers. According to financial data provider Moneyfacts, the number of mortgage deals available with just a 5% or 10% deposit has reached its highest level since March 2008.
These low-deposit options are a lifeline for young professionals and families struggling to save amid rising living costs, and they represent a significant step toward making homeownership more accessible across the UK.
Why Now?
These sweeping changes come amid shifting expectations for interest rates, driven in part by financial uncertainty following the US’s latest round of trade tariffs. With inflationary pressures and rate policy now more uncertain, lenders seem to be making a strategic push to secure new business before further volatility arises.
What This Means for You
Whether you’re a first-time buyer, someone looking to move house, or a homeowner thinking about remortgaging, now may be a smart time to explore your options. With more flexible rules, more competitive rates, and more deals requiring smaller deposits, the mortgage landscape in the UK is the most borrower-friendly it’s been in nearly two decades.
As always, it’s wise to consult with a mortgage broker or financial advisor to determine which deals suit your specific financial situation.
