Two more mortgage lenders have announced cuts to their rates as banks continue a price war to attract customers.
Nationwide and HSBC are the latest in a slew of lenders who have cut rates at the start of 2026.
Nationwide’s reductions of up to 0.2 percentage points, which will occur on Thursday 15 January, include the launch of a new 3.5 per cent two-year fixed deal for those with 40 per cent equity in their home or an equivalent deposit.
The deal is the lowest-priced fix on the market available to all customers – it can only be beaten by a 3.47 per cent deal from Lloyds that requires borrowers to have a Club Lloyds current account.
The scale of HSBC’s cuts has not yet been revealed but will be across a range of residential rates.
It will be the second time it has cut rates this month after doing so on 4 January.
The reductions follow similar moves from a range of UK lenders.
Barclays and Halifax cut rates last week, with experts saying at the time that banks were clearly in a battle to attract customers, with fewer property transactions expected this year compared to 2025.
Nick Mendes, mortgage technical manager at broker John Charcol, said Nationwide has set a “benchmark” for other lenders.
Nationwide’s latest cuts feel like a real line-in-the-sand moment, and a benchmark other lenders will be watching closely.
He said the 3.5 per cent deal was “a strong headline rate and one that will turn heads.”
“It is also encouraging to see another major lender following the sharper pricing we saw earlier in the week from Lloyds for Club Lloyds current account holders. Competition is clearly building pace,” he added.
Aaron Strutt, product and communications director at brokerage Trinity Financial, said Nationwide and HSBC’s moves were “good news for borrowers”.
“We expected to start this year with the lenders cutting their rates and making them more attractive to borrowers and that’s exactly what is happening,” he said.
Prices are currently at the lowest level they have been at since 2022 after multiple cuts to the Bank of England base rate last year.
Pricing is based on numerous factors. Key elements include a need to attract business, and the level of swap rates – which follow predictions for where the base rate will go in the future.
There was a cut to the base rate last month – to 3.75 per cent – and some further cuts are predicted to occur this year.
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Experts are divided on how low rates will go in 2026, but some believe they could reach 3 per cent later in the year for those with the largest amounts of equity in their property.
Around 1.8 million borrowers are coming to the end of their fixed rates in 2026 and borrowers can secure a new deal several months before their current mortgage fix ends.
This means that the rate is locked in if prices rise, but if they fall, you can usually switch to a cheaper rate with the same lender.
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