TSB and NatWest have joined a growing list of major UK lenders cutting mortgage rates ahead of the Chancellor’s Autumn Budget, in what experts say is a sign of improving market confidence and easing inflationary pressure.
Both banks announced reductions of up to 0.21 percentage points, with the biggest cuts applied to shorter two-year fixed deals. The move follows similar announcements from Barclays, HSBC and Santander, all of which have trimmed fixed-rate mortgage products over the past week.
The shift marks a rare moment of optimism for homeowners and buyers after two years of volatility in the mortgage market.
Mortgage brokers welcomed the reductions, describing them as a turning point in market sentiment and an opportunity for borrowers to lock in more competitive deals before the Budget.
Justin Moy, Managing Director at EHF Mortgages in Chelmsford, said the cuts were “significant”, particularly on shorter-term products.
“We’re seeing two-year fixes becoming cheaper than five-year options, but that doesn’t automatically make them the best deals,” he said. “Borrowers should seek advice before committing. With the Budget around the corner, it’s likely to be a quiet few weeks — but those with expiring mortgages can secure a good rate now.”
Vijay Rabadiya, Founder of The Mortgage Vine in Borehamwood, said the synchronised rate cuts reflected a shift in lender confidence.
“The fact that multiple high-street names have moved almost simultaneously shows renewed appetite to capture early business before year-end,” he said.
“Two-year fixes are being cut most sharply, suggesting lenders believe interest rates have peaked. Falling swap rates are giving banks confidence to compete again — borrowers are the winners, for now.”
Michelle Lawson, Director at Lawson Financial in Fareham, said the cuts offered “good news for borrowers” after months of rate uncertainty.
“It’s welcome relief and shows a bit of stability returning to the mortgage market. Rates are edging down, not plummeting, but the direction of travel is finally the right one.”
Ranald Mitchell, Director at Charwin Mortgages in Norwich, agreed that lower rates could help reignite housing market activity.
“With living costs still high and disposable incomes under pressure, even small rate reductions make a big difference to confidence,” he said. “Cheaper mortgages give buyers and movers a reason to act rather than wait.”
According to Ben Perks, Managing Director of Orchard Financial Advisers in Stourbridge, the latest cuts show lenders are “fighting for business” before potential fiscal tightening.
“It’s widely thought the Chancellor could bring in property market measures at the Budget, so lenders are cutting rates now to boost lending before any changes. We’re likely to see more lenders join the scrap for business in the coming days.”
Jack Tutton, Director at SJ Mortgages in Fareham, urged borrowers to act quickly.
“Improving market conditions are driving these cuts,” he said. “But with the Budget just weeks away, securing a rate early could pay dividends if the markets react negatively to the Chancellor’s decisions.”
While brokers welcomed the reductions, many warned the downward trend could prove short-lived.
David Stirling, Independent Financial Adviser at Mint Wealth in Belfast, said: “There’s some welcome relief for borrowers as lenders push for new business before year-end. But this momentum may not last — the Autumn Budget could shift market expectations quickly.
“It’s possible lenders are eyeing year-end targets and bonuses, prompting a short-term push for volume. Borrowers should act now while rates are favourable.”
Economists say the cuts reflect declining swap rates — the key indicator used by banks to price fixed-rate mortgages — and growing confidence that the Bank of England’s tightening cycle is nearing its end.
However, with the Chancellor expected to unveil fiscal tightening measures to address the UK’s £30bn budget shortfall, brokers warn that uncertainty could quickly return.
For now, though, borrowers appear to have a narrow window of opportunity to secure lower rates before the next round of market adjustments.
