Several of Britain's largest mortgage lenders cut fixed-rate deals below 4% in the second week of August 2026, as swap rates eased in the run-up to the Bank of England's 11 August decision to hold the base rate at 3.75% for a fifth consecutive meeting. By mid-August, Nationwide, Halifax and NatWest had repriced five-year fixed products for borrowers with at least 40% equity, with two of the three now advertising rates starting at 3.89%. According to Moneyfacts data, the moves mark the first widely available sub-4% five-year fixes since March 2025.
Five-year fixes lead the cuts
Nationwide reduced its five-year fixed rate for remortgage customers at 60% loan-to-value to 3.89% on 12 August, down from 4.14% a month earlier. Two days later, Halifax followed with a 3.92% five-year deal at the same LTV tier, while NatWest priced its equivalent product at 3.94%.
HSBC and Barclays had not repriced by 15 August, but mortgage brokers expect both to follow within a fortnight, based on the usual lag between the first movers and the rest of the high street.
Two-year deals move more slowly
The average two-year fixed rate across the market stood at 4.61% on 14 August, according to Moneyfacts — down just 0.09 percentage points since the start of the month. Lenders continue to price in a wider margin on shorter deals to offset the risk of repricing again within two years.
The gap between two-year and five-year fixes has widened to around 0.7 percentage points, close to its highest point in eighteen months. That gap has made five-year deals the more competitively priced option for the first time since early 2025, brokers say, though it locks borrowers in for longer.
Falling swap rates, not the base rate hold, are driving the cuts
Mortgage pricing tracks swap rates — the wholesale cost lenders pay to fix money for a set period — rather than the Bank Rate itself. Five-year swaps fell to roughly 3.55% by mid-August, down from 3.85% in June, as markets priced in a cooling in wage growth and food-price inflation reported by the Office for National Statistics earlier in the month.
The cuts come despite a hawkish undertone at the Bank of England's 11 August meeting, where three of the nine-member Monetary Policy Committee voted for a rate rise rather than a hold. Swap markets, which look further ahead than a single vote split, moved on the underlying data rather than the committee's near-term stance.
What it means for borrowers coming off fixed deals
Around 1.6 million UK fixed-rate mortgages are due to expire in the second half of 2026, according to UK Finance figures published in July. Borrowers coming off deals fixed in 2021 and 2022, when five-year rates commonly sat below 2.5%, will still see higher monthly payments even at the new sub-4% pricing.
A borrower with a £200,000 repayment mortgage moving from a 2.1% five-year fix to a 3.89% deal over a 25-year term would see monthly payments rise from around £860 to roughly £1,040 — a difference of £180 a month.
Mortgage brokers, including L&C Mortgages, have reported a rise in remortgage enquiries since the Nationwide and Halifax cuts were announced, as borrowers with deals expiring before the end of the year look to lock in pricing early. The next round of lender repricing is expected after the ONS publishes its August inflation figures on 17 September.