According to this week’s Moneyfacts Rate Watch, interest rate activity among lenders is increasing after the Christmas holidays.
This week, 15 lenders adjusted their interest rates, with the average two- and five-year rates falling 3 basis points to 4.8% and 4.88% respectively. Meanwhile, Moneyfacts’ average mortgage interest rate fell from 4.87% to 4.85%.
Last week only four lenders have made changes to their rates.
The mortgage type that saw the largest reductions were five-year fixes up to an LTV of 70%, which were reduced by an average of 8 basis points.
Other lines that saw significant reductions were the two-year fixes to 60%, 75%, 80% and 90% LTV and three-year fixes to 70% and 95% LTV, all of which were reduced by an average of 3 basis points.
Moneyfacts product expert Caitlyn Eastell said: “Lender activity has increased after the Christmas break, with more than fifteen lenders adjusting their offering. It would also not be surprising to see further cuts trickle down in the coming weeks as swap rates are around 30-day lows.
“The cuts this week include some significant reductions from Masthaven Finance by up to 50 basis points. A handful of the largest lenders have also cut this week, including Halifax by 16 basis points, Barclays Mortgage by up to 30 basis points, Gen H by up to 20 basis points, first direct by up to 16 basis points and HSBC by up to 18 basis points.
“Last month’s base rate cuts would have done enough to allay borrower concerns about purchasing or refinancing this year. But borrowing in 2026 could become more favorable with markets currently forecasting that the base rate could settle somewhere between 3.25% and 3.50%.”