HSBC and NatWest lower mortgage rates

by Trinity Financial

Oct 14 2026

NatWest and HSBC are the latest major mortgage lenders to improve their rates, providing some welcome relief for homebuyers and borrowers looking to remortgage.

The latest cuts mean more banks and building societies are offering fixed-rate mortgages below 5%, although borrowing costs remain higher than many customers would like.

After several weeks of rising mortgage rates, competition between lenders appears to be increasing again. NatWest, HSBC and other banks are lowering selected rates, with further announcements potentially on the way.

Mortgage lenders are approaching the end of the year, and while wholesale funding costs have increased, they still need to attract new business and build their lending pipelines for a strong start to 2027.

Slower housing market conditions could also encourage more competitive mortgage pricing.

NatWest returns to the sub-5% fixed-rate mortgage market

NatWest is reducing selected mortgage rates, with its new deals including a sub-5% five-year fix. The changes mean NatWest is rejoining the relatively small group of major lenders offering fixed-rate mortgages below 5%.

These changes are welcome news for borrowers searching for competitive mortgage deals, although rates remain considerably higher than many homeowners had hoped to pay.

HSBC mortgage rates set to fall below 5%

HSBC is also cutting selected mortgage rates from Thursday 15 October.

Before the changes, HSBC's lowest rates included two-year fix and five-year fix just over 5%.

Although HSBC has not confirmed the exact reductions in advance, its latest announcement suggests its most competitive mortgage rates could move back below 5%, particularly for borrowers with larger deposits or substantial equity.

The bank is reducing selected residential and buy-to-let mortgage rates, which should also provide more options for landlords.

Which mortgage lenders are offering the cheapest fixed rates?

Several leading mortgage lenders are competing for borrowers with larger deposits, particularly those requiring mortgages at 60% loan-to-value.

Examples of competitive mortgage rates include:

HSBC rates shown before its announced reductions. Rates are subject to eligibility, deposit requirements and product fees..

Barclays still offering a sub-4% two-year tracker mortgage

While fixed rates have been attracting attention, tracker mortgages remain significantly cheaper in some cases.

Barclays continues to offer a two-year tracker mortgage at just below 4%, which could appeal to borrowers comfortable with variable monthly repayments.

Trackers may be particularly attractive to borrowers with larger deposits who do not want to lock into a fixed rate for two or five years.

However, tracker mortgage rates can increase if the Bank of England raises its base rate, making them less suitable for borrowers who require certainty over their monthly payments.

Will mortgage rates continue falling towards the end of 2026?

The latest reductions are encouraging, particularly after the sharp increases in fixed mortgage rates during September.

However, the outlook remains uncertain. Higher wholesale funding costs, speculation about further Bank of England base rate increases and the ongoing conflict involving Iran continue to create challenges for mortgage pricing.

Competition may still encourage lenders to reduce selected rates, particularly if housing market activity remains subdued.

There are now numerous mortgage products available at rates well below 6%, but a sustained return to significantly cheaper fixed-rate mortgages is far from guaranteed.

Trinity Financial mortgage market comment

Aaron Strutt, Product Director at Trinity Financial, says: "We knew a few lenders were preparing to reduce their mortgage rates this week, and there may well be further announcements following these price cuts.

"It has been unusually quiet in the mortgage market recently, with fewer changes from the big banks and building societies. The latest reductions from NatWest and HSBC are certainly a step in the right direction.

"We are getting closer to the end of the year, and although funding costs have clearly increased, mortgage lenders still need to issue loans and build their pipelines for a strong start to 2027.

"Hopefully, increased competition and slower housing market conditions will encourage more lenders to cut their rates.

"While it is encouraging to see more fixed-rate mortgages below 5%, these deals are still much more expensive than many borrowers would like. With uncertainty surrounding interest rates and international events, it is difficult to predict how much cheaper mortgages will become."

Looking for the cheapest mortgage rates?

Trinity Financial's mortgage brokers compare rates from major banks, building societies and specialist lenders to help borrowers find competitive mortgage deals.

Whether you are buying your first home, moving property or remortgaging, our brokers can assess fixed and tracker mortgage options, including preferential deals for higher earners and borrowers requiring larger mortgage loans.

Speak to a Trinity Financial adviser today

The mortgage market moves fast — and the right advice can make a significant difference to the rate and deal you secure. Get in touch with our team to discuss your options.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

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