Customers of three major banks have received significant news today as Santander, first direct, and TSB have announced substantial reductions in mortgage rates. These cuts come amid a broader trend of major lenders lowering borrowing costs, with TSB reducing selected rates by as much as 0.8%.
TSB Reduces Rates by Up to 0.8%
From Friday, April 24, TSB has trimmed selected residential purchase and remortgage rates by up to 0.6%, and rates on selected Buy to Let and Portfolio Buy to Let products by up to 0.8%. This marks a significant shift for the lender, which has been relatively expensive in recent months.
Santander Lowers Fixed Rates
Santander has confirmed it is lowering selected new business first-time buyer, home mover, and remortgage fixed rates by up to 0.25%. Within its product transfer range, certain residential fixed rates will be reduced by up to 0.08%.
First Direct Drops Rates Across Dozens of Products
On Thursday, first direct announced it had dropped rates across dozens of two and five-year fixed mortgage products, with reductions of up to 0.38 percentage points coming into effect immediately. The rate cuts mean that first direct's range now starts at 4.71% for a 2 Year Fixed Fee Standard at 60% LTV for first-time buyers and home movers. The same product for existing customers is priced marginally lower at 4.66%.
The biggest cuts are seen across the bank's two-year mortgages, though they extend to its complete range of 2 Year and 5 Year products, covering all LTVs up to 95%. For five-year deals, the most substantial reductions are 0.25 percentage points, applying to the 5 Year Fixed Fee Standard at 90%, 85%, and 90% LTV, now ranging between 4.95% and 5.09%.
Liam O'Hara, head of mortgages at first direct, said: "We are committed to supporting our customers on their house purchase journey and continue to review our pricing regularly to ensure the best value we can for all our customers. Our broader product features are designed to provide as much benefit and flexibility as we can – ranging from unlimited overpayments, 40-year maximum terms, and capped booking fees. We're regularly looking at ways to provide even more value for customers."
Brokers Urge Borrowers to Act Fast
Justin Moy, managing director of Chelmsford-based EHF Mortgages, said: "Lenders are clearly looking to encourage borrowers and, based on this evidence, feel that the outlook is better than just a few weeks ago. Swap rates haven't improved significantly, suggesting that lender confidence is just as important as pricing. The good news here is that both property buyers and remortgage borrowers see a benefit, and so they may want to grab the opportunity while they can."
Ken James, director at London-based Contractor Mortgage Services, welcomed the reductions but warned the market remained "hypersensitive". He said: "With TSB and Santander now joining Virgin Money, Barclays, Halifax and a growing list of other lenders trimming mortgage rates, the question is are we finally edging out of the worst of the disruption triggered by the Middle East conflict? On the surface, the momentum looks encouraging. After far too much swap rate volatility and a pricing whiplash from lenders, any downward movement feels like a welcome shift. But let's not pretend the sector is breathing easy. If we blink at the wrong moment, the News at Ten could still deliver another setback. Markets remain hypersensitive, and confidence is still as fragile as the peace talks."
Harry Goodliffe, director of Winchester-based HTG Mortgages, struck a similarly cautious note, suggesting "it still feels a bit early to call the latest cuts a proper trend". He continued: "Things are improving as the market adjusts to the tentative stability in the Middle East, but it's twitchy and could turn again very quickly, so I wouldn't be reading this as the start of a sustained fall in borrowing costs just yet."
Richard Davidson, mortgage advisor at onlinemortgageadvisor.co.uk, offered a cautiously optimistic outlook: "These are confident moves that suggest lenders are ready to compete for business again. However, it's not yet clear whether this pace of cuts will continue and take us back to the lows we saw in February. But with all eyes on the international situation, it's starting to feel like things are moving the right way at last."
Ben Perks, managing director at Stourbridge-based Orchard Financial Advisers, warned borrowers not to hang about: "TSB have made some chunky cuts to their rates and follow a few of the high street lenders to move rates downward this week, which is an encouraging time for borrowers. My message would be to act fast and secure rates while you can. After all, we're only one Trump Truth Social post away from the next hike."
Nouran Moustafa, practice principal and IFA at Roxton Wealth, labelled the TSB reductions as "material" and an indication that genuine competition is making a comeback across the high street. She said: "While some lenders have clearly priced tactically in recent months, reductions of up to 0.60% are material and will absolutely catch the attention of borrowers. It does not remove affordability pressures overnight, but it is a step in the right direction. What the property market needs now is not just isolated cuts, but sustained momentum, consistency and a clear willingness from lenders to support activity. Against the backdrop of Iran-driven volatility in oil and inflation expectations, cuts like this feel even more meaningful because they show some lenders are still willing to compete."
David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth, said: "One swallow doesn't make a summer, but TSB cutting seems to be part of a broader trend of lenders quietly admitting that their rates have been eye-wateringly high."
