UK lenders are intensifying a mortgage price war, with HSBC and the Co-operative Bank announcing fresh rate cuts, while Halifax and Lloyds Bank have relaxed their affordability rules to allow homebuyers to borrow more. The moves come amid financial turmoil triggered by US trade tariffs, which have altered expectations for UK interest rates.
HSBC said it would reduce rates across a range of products from Wednesday 16 April, although full details of the new pricing have yet to be disclosed. The Co-operative Bank plans to relaunch its mainstream and buy-to-let mortgage ranges on Thursday 17 April, cutting rates on new two- and three-year fixed deals for homebuyers by up to 0.26 percentage points, and by up to 0.18 percentage points for those remortgaging. Other lenders, including Gen H, have also announced rate reductions.
Separately, Halifax, Bank of Scotland, Lloyds Bank and BM Solutions – all part of Lloyds Banking Group – have lowered their stress test rates with immediate effect. This change means a typical household applying for a mortgage could potentially borrow £38,000 more, according to a group spokesperson. The Financial Conduct Authority recently suggested that some lenders' stress tests may be unduly restricting access to affordable mortgages.
The Lloyds group gave an example of a couple with two dependant children and a total household income of £75,000: previously they might have borrowed a maximum of £286,000, but under the new rules this could rise to £324,000. The number of low-deposit mortgages allowing buyers to borrow up to 95% of a property's value has hit a 17-year high, according to Moneyfacts, which is particularly beneficial for first-time buyers.
