first direct has become the latest mortgage provider to cut prices in 2025 and offer up to 0.30% off fixed interest rates.
The lender, which offers products directly to customers and not through brokers, said the lowest rate offered is now 4.13% for new customers or 4.10% for existing borrowers.
This rate is available on the 5-year fixed standard mortgage for customers who need to borrow up to 60% of the value of their property.
But it has also cut rates on products for people with smaller deposits. It said it had applied some of its biggest rate cuts to mortgages with higher Loan-to-Value (LTV) rates of 90% and 95%, with reductions of up to 0.29%. The 5-year fixed standard with an LTV of 90% is now priced at 4.74%.
The most significant reduction is available for remortgage customers with a 2-year fixed standard mortgage with an LTV of 85% – this is now available at 5.04%.
Liam O’Hara, head of mortgages at First Direct, said: “We are very pleased to start the new year with rate cuts across all our repayment ranges on two, three and five year fixed rate mortgages.”
He added: “We will continue to review our prices regularly throughout the year to ensure we are offering the best value to our customers.
“There are many more ways we help our customers get the best value from their mortgage beyond the interest rates we offer: our mortgages are completely flexible with free unlimited overpayments on all our ranges, we offer maximum terms of 40 years and our product booking options Costs are capped at £490.
The price cuts come just a day later HSBC has made a number of price cuts to its mortgage offer and after Leeds Building Society also reduced its rates.
Nicholas Mendes, mortgage technical manager at John Charcol, welcomed these price changes – but does he think more lenders will follow suit?
“It has been a positive start to the new year,” he said, “with competition between mainstream lenders slowly increasing. The rate cuts, such as those from First Direct and HSBC, highlight that lenders are keen to attract borrowers, but the scope for cuts remains limited.
“While we are likely to see further rate cuts in the coming weeks, these are expected to be modest, with only minimal changes to the best deals currently available.”