Head of Content
Mortgage rates have been in flux since the economic turmoil that began with the government’s Mini Budget in 2022. While there have been spells of relative stability since, factors including fluctuating inflation and swap rate volatility have seen rates creep back up.
First-time buyers and remortgaging homeowners were largely limited to mortgages with rates of 5% or more in the wake of the Liz Truss debacle, but improving economic conditions and Bank of England base rate cuts have paved the way for more favourable deals.
But is it now possible to get a mortgage with a rate lower than 4%? Read on to find out…
Can you get a mortgage rate of less than 4% right now?
Residential mortgage rates lower than 4% are not available at the time of writing, but this could change at any moment, as lenders are constantly refreshing their product lines.
The lowest rates right now in the residential space are just over 4%, usually reserved for borrowers with low loan-to-value (LTV) ratios. For example, NatWest has a deal available at 4.07% and HSBC’s mortgage rates start at 4.06% for their Premier customers.
Rates under 4% are, however, available in the buy-to-let market, with specialist lenders including Molo, Zephyr and Metro Bank offering them for landlords. But these deals come with hefty fees which should be factored in when comparing them with higher rate mortgages.
You can use our free, whole-of-market mortgage comparison service to check whether any sub-4% mortgage rates are available below:
Compare the latest mortgage rates for FREE
When were sub-4% mortgage rates last available?
These rates were last readily available in 2021 in the wake of the coronavirus pandemic as the Bank of England began increasing its rate to tackle inflationary pressures after this point. Mortgage rates saw a sharp rise beyond this when the Mini Budget was set out in 2022.
Since then, some sub-4% mortgage deals have briefly arrived on the market. Following the base rate cuts last year, some of the UK’s biggest mortgage lenders were drawn into a pricing war, and as a result, introduced rates of just under 4% to undercut their competitors.
High street banks Nationwide and Barclays were among the first to reintroduce mortgage products with rates just under 4%, forcing other lenders to reprice their ranges too.
In October 2024, NatWest rolled out two-year and five-year fixed rate mortgages with rates of 3.99% and 3.84%, respectively, for borrowers with at least 60% LTV. Specialist lenders, such as MPowered Mortgages, also began offering sub-4% mortgage deals.
However, it wasn’t long before market fluctuation crept back in, sparked by factors including the Labour Government’s Autumn Statement. As a result, these lenders have now increased their rates, albeit marginally in some cases, spelling an end to sub-4% deals for now.
When will sub-4% mortgage deals return?
The good news is that mortgage rates are forecast to go down in 2025, in line with the Bank of England’s base rate. How quickly the base rate declines will depend on inflation remaining below its 2% target, and the latest figures suggest it dipped unexpectedly in December 2024.
This strengthens the case for a reduction on the base rate’s current level of 4.75%, which would potentially clear the way for a new wave of mortgages products with rates lower than 4%. The bank's monetary policy committee is due to meet on 6th February to review the base rate.
However, nothing is guaranteed, as there are global variables that could yet throw a curveball to policymakers by disrupting inflation levels once more, including the war in the Ukraine and Donald Trump’s presidency imposing tariffs on all imports to the US.
If you’re exploring your mortgage options and want to know what rates will be available to you, use our free, whole-of-market comparison service or speak to one of our brokers for a complete rundown of every possibility.