NatWest and Coventry Building Society cut mortgage rates, bringing relief to borrowers and stabilising the market

2:13

UK mortgage borrowers have received a pre-Christmas boost after NatWest and Coventry Building Society announced a fresh round of rate reductions, intensifying competition among lenders as the market shows signs of stabilising after months of volatility.

NatWest cut rates across its residential and buy-to-let mortgage ranges by as much as 0.39%, with changes taking effect from 6 December 2024. Residential two-year fixed rates started from 4.27% at 60% loan-to-value, while five-year purchase products fell to 4.15%. Its largest reductions were applied to selected buy-to-let remortgage deals.

Coventry Building Society followed with reductions across all its fixed-rate mortgages, cutting residential products by up to 0.26% and buy-to-let deals by as much as 0.25%. A two-year residential purchase mortgage at 65% loan-to-value, carrying no product fee, was reduced to 4.59%.

Jonathan Stinton, head of intermediary relationships at Coventry Building Society said, "Even though we’re getting to the end of the year, interest from borrowers remains busy". He added, "Both new and existing borrowers were looking to plan ahead, with the lender aiming to help customers “get into the best position for 2025."

The reductions came as average mortgage costs began easing again. The typical two-year fixed rate fell to 5.4894%, from 5.5197% a week earlier, according to Moneyfacts data reported at the time.

Ben Perks, managing director at Orchard Financial Advisers, said: "For the first time since the Budget, we’ve seen more reductions than increases". He added, "It definitely feels like the winds are changing and hopefully they’ll continue to do so."

The latest cuts offer some relief to homebuyers and borrowers approaching remortgage decisions, while signalling increasingly aggressive competition among UK lenders heading into 2025.