HSBC has cut its mortgage rates, following several weeks of rate rises from most major lenders. 

The bank has lowered its rates by up to 0.19 percentage point, taking some of them below the 5 per cent mark. 

Mortgages in that bracket almost disappeared over the last month, with only nine left on the market in early October according to Moneyfacts. 

However, sub-5 per cent rates are currently only available to those with large deposits or equity of 40 per cent or more. 

Average fixed rate mortgages are hovering just shy of 6 per cent, putting pressure on those currently buying or needing to remortgage.

HSBC's cheapest two-year fix is now at 4.99 per cent for anyone remortgaging with at least 40 per cent equity. 

The deal comes with a £999 fee, and on a £200,000 mortgage being repaid over 25 years would cost £1,168 a month.

For those buying with at least a 20 per cent deposit, HSBC is offering a two-year fix at 5.19 per cent with a £999 fee and £250 cashback – one of the best on the market. 

Are there more mortgage rate cuts to come? 

At the beginning of the year, most borrowers were able to get rates below 4 per cent with two-year fixes going as low as 3.5 per cent.

The Bank of England was previously forecast to cut the base rate of interest throughout 2026 because inflation was on a downward trajectory.

Cutting the base rate reduces borrowing costs for lenders and would result in mortgage rates falling.

However, the escalation of hostilities in the Middle East and resulting rises in energy costs have led to fears of higher inflation being stoked once again.

While the Bank of England held base rate at 3.75 per cent in September, the sixth consecutive hold since December 2025, it is now anticipated that it will raise interest rates.

It is not entirely clear why HSBC has cut its rates today. Mortgage lenders must balance their own borrowing costs and profit margins with the need to have attractive rates that draw in new customers. 

Mortgage brokers think the latest cut could encourage competing lenders to follow.

However, in general, mortgage experts think that rates won't experience any dramatic falls for some time. 

Justin Moy, managing director at Chelmsford-based EHF Mortgages, said: 'The market feels like it has plateaued over the last week or so, still around 1 per cent more than we were just a few months ago, but to see HSBC move will encourage other lenders to follow over the coming days.'

Aaron Strutt of broker Trinity Financial, added: 'With so much talk of base rate rises and the war in Iran dragging on it seems unlikely fixed rates will get a huge amount cheaper but the mortgage market is notoriously hard to predict.

'Thankfully there are lots of rates to choose from well below 6 per cent.' 

There are other options for those with the biggest deposits or equity in their home.

What are the top mortgage deals today? 

For those buying with a 40 per cent deposit, Yorkshire Building Society has a 4.83 per cent two-year fix with £1,495 fees, or a 4.95 per cent five-year fix. 

Santander has a 4.92 per cent two-year fix and a 4.93 per cent five-year deal, both with £1,499 fees and £250 cashback.

As for those remortgaging, Yorkshire Building Society has a 4.96 per cent two-year deal or 5.05 per cent five-year fix.

For those considering a tracker deal, Barclays has a 3.99 per cent two-year rate according to Trinity Financial.

Trackers follow the base rate, plus or minus a certain percentage – so they could be a risky move at the moment with the base rate potentially set to rise.  

Lloyds Bank and Halifax are offering 4.06 per cent two-year trackers while Nationwide has a 4.09 per cent deal. If the base rate rises, these deals will increase by the same margin.

Halifax is also offering many of the cheapest deals to higher earners and Lloyds Premier bank account customers with three-year fixes from 4.87 per cent and five-year fixes from 4.82 per cent.