Major lenders are cutting mortgage rates again in a boost for homebuyers, despite growing fears that renewed global instability could yet derail hopes of cheaper borrowing costs later this year.
Banks including Barclays, NatWest and Coventry Building Society have all reduced rates across parts of their mortgage ranges, prompting brokers to urge borrowers to move quickly before deals disappear.
The cuts come as financial markets increasingly bet that the Bank of England will avoid further rate rises in 2026, even as inflation risks linked to the Middle East conflict continue to cloud the outlook.
Barclays has reduced some mortgage rates by as much as 0.43 percentage points, including lowering a three-year fixed deal for borrowers with a 5pc deposit from 5.85pc to 5.42pc.
The move means a homeowner with a ยฃ200,000 mortgage repaid over 25 years would see monthly repayments fall from roughly ยฃ1,270 to ยฃ1,219.
NatWest has also cut rates by up to 0.54 percentage points, including on selected remortgage tracker deals, while Coventry Building Society earlier reduced residential and buy-to-let mortgage rates by up to 16 basis points.
Mortgage brokers said improving swap rates โ which heavily influence fixed mortgage pricing โ have encouraged lenders to become more competitive after months of pressure on affordability.
Justin Moy, managing director at EHF Mortgages, said borrowers should act swiftly because lenders can reverse course with little warning if market conditions worsen.
He warned that while expectations of further Bank of England tightening have eased, geopolitical uncertainty linked to the US-Iran conflict still poses risks to inflation and borrowing costs.
Dariusz Karpowicz, director at Albion Financial Advice, described the latest cuts as โwelcome newsโ for buyers ahead of the summer market, but cautioned that cheaper deals often vanish quickly once demand rises.
The recent reductions mark a notable shift after years of sharply elevated borrowing costs. The Bank of England previously raised interest rates as high as 5.25pc during its campaign to bring inflation under control before gradually cutting rates back to 3.75pc as price pressures eased.
However, economists warn that rising energy prices and broader disruption linked to instability in the Middle East could complicate future rate decisions if inflation begins climbing again.
For now, though, lenders appear increasingly willing to compete for customers โ offering rare relief to buyers and homeowners after one of the toughest mortgage markets in more than a decade.
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