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Mortgage price war

Journalist: Callum Mason, i

ended 09. December 2025

Some mortgage lenders seem to be dropping rates in recent days.


Santander now seems to have the lowest priced deal at 3.51%, though only for those with very large loans, and Nationwide has some low rates too.

Are we starting to see the start of a price war and what is triggering this? Could rates go even lower? And can the 3.51% be beaten anywhere?

8 responses from the Newspage community

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Nick Gatti
Mortgage Adviser at NG Mortgages
The mortgage price war is 100% official. And it’s not just down to one factor but a perfect storm of two major drivers. First is swap rates. Markets expect the Bank of England to cut the base rate on Dec 18 from 4% to 3.75%. That's lowered funding costs for 2 and 5 year mortgages, so lenders are already pricing it in and can afford to be more competitive on what they offer consumers. The second factor is volume (or a lack of it). Approvals for house purchases fell in October to the lowest since May. Remortgage approvals hit their lowest since February, and net mortgage borrowing dropped massively too. This all means less demand and so lenders need to be more competitive to hit their targets. It’s not just rates either. They're making it easier to borrow more: HSBC is increasing income multiples to 6x for Premier clients, and other lenders are expanding income boosters to more applicants. So we could see deals better than 3.51% next year and even more customers having access to them.
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Craig Fish
Director at Lodestone Mortgages
Over the coming days and weeks I suspect that we will see many more reductions from a whole host of lenders. With predictions of base rate dropping to 3% at some point in 2026, it’s highly likely that rates will drop below 3.51% before too long.
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Darryl Dhoffer
Founder at The Mortgage Geezer
Effective as of Monday 8th December, Sonia Swap rates have actually increased, compared to recent rate reductions and for anyone that follows fixed mortgage pricing knows when they drop, then normally lenders rates drops as well. So with any rises, you guessed it, rates may increase - lenders may be baking in a Bank Of England Base rate drop, which may not directly affect fixed price mortgages moving forwards, so if you see low rates today - grab them as may not last long!
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Michelle Lawson
Director at Lawson Financial
Christmas is finally coming for borrowers with lenders passing on glad tidings of rate reductions ahead of the much anticipated Yuletide Bank Base rate cut. Lenders are struggling to meet targets so tweaking policy and rates and with the associated market confidence should hopefully see 2026 start with a much needed big bang for the mortgage and property industry rather than a damp squib.
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David Stirling
Independent Financial Adviser at Mint Wealth
It's all kicking off in the mortgage market, as some major lenders slash prices and offer up an early sale for lucky borrowers. The banks must be convinced that an upcoming base rate cut on Threadneedle Street is nailed on and are pricing competitively to suck up as much market share to hit end of year targets. Hopefully this momentum will continue strongly into 2026.
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Ben Perks
Managing Director at Orchard Financial Advisers
I think we’ll see a sub 3.5% rate before the year is out. Lenders are starting to jostle for position and with a very likely base rate reduction the possibility of better rates is high.
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Patricia McGirr
Founder at Repossession Rescue Network
You can’t beat an end-of-year rate cut to get borrowers thinking positively about the future. It’s good to see big lenders vying for business and passing savings down the line. It would be a perfect time for them to also look favourably on those struggling too. I mean, what could create a happier ending than seeing new products and better rates for those who need a helping hand this Christmas.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Following the budget, and the end of the whole "will they, won't they" debate that always proceeds any financial statement from the Government, the money markets have been able to better understand the next few months and better project what they feel will be the outlook for UK plc. And the, relatively, benign budget with no radical moves in any direction, has given them the context with which to view the rest of the economic data, with the end result seeming to be a general feeling that the Bank of England will be looking to further nudge down the base rate. This downward sentiment has then fed into swap rates, which in turn has meant lenders have been able to reduce their fixed rate offerings. How much lower we may see markets move is the big question.