TSB and Other Lenders Cut Mortgage Rates: Impact on First-Time Buyers

Mortgage Rate Changes Across Multiple Lenders

As of 15th April 2026, TSB has become the latest lender to reprice, with rates being cut by as much as 0.45%. The bank has lowered residential two-year fixed house purchase rates by up to 0.45%. However, product transfer residential two- and five-year fixed rates between 0% and 90% loan-to-value (LTV) are being increased by up to 0.15%. Buy-to-let (BTL) two- and five-year fixed rates between 0% and 75% LTV are also up by up to 0.15%. Additional borrowing on all residential and BTL fixes will go up by as much as 0.15%.

Following suit, Santander will reduce rates across its higher LTV products, effective 16 April. These include all 85% to 95% LTV two-year fixed, first-time buyer products by up to 0.28%. Other first-time buyer rate decreases include the 90% LTV two-year tracker rate, which is being cut by 0.30%, while all 75% LTV 10-year fixed rates are being lowered by up to 0.15%. For home movers all 60 to 95% LTV two-year fixed rates are being cut by up to 0.28% and all 60% to 95% LTV two-year tracker rates are being lowered by up to 0.25%.

Atom bank has also made interest rate cuts across its near prime mortgage range. All near prime products, for both purchase and remortgage purposes have been reduced by 0.20%. Fleet Mortgages has made rate reductions of 20 basis points on its range of 75% LTV two-year fixed-rate mortgage products. Coventry for Intermediaries has announced product changes, effective 16 April. Residential rates for new borrowers will be lowered across all two-year fixed exclusive first-time buyer rates at 65% to 86% LTV and all three-year fixed exclusive first-time buyer rates at 65% to 75% LTV.

Real-World Impact on First-Time Buyers

Let’s take the example of a first-time buyer looking at Santander’s 90% LTV two-year tracker rate, which is being cut by 0.30%. On a £250,000 repayment mortgage at 90% LTV, the monthly payment at the old rate of 5.20% would have been £1,382. With the new rate of 4.90%, the monthly payment drops to £1,321. This equates to a saving of £61 per month or £732 per year. This is a significant saving for first-time buyers, especially considering the financial challenges of stepping onto the property ladder.

Market Context and Comparison

These rate cuts come in the context of a UK base rate of 3.75% as of April 2026. Six months ago, the base rate was 3.50%, indicating a slight upward trend. However, lenders are responding to easing in swap markets, leading to these rate reductions. For instance, two-year SONIA swaps have fallen from 4.111% to 4.000%. This is a positive sign for borrowers, as it shows lenders are not simply holding back and defending pricing.

For first-time buyers, these rate cuts could make mortgages more affordable. Compared to a year ago, when the average two-year fixed rate for a 90% LTV mortgage was around 5.50%, the current rates represent a significant reduction. This could potentially enable more first-time buyers to enter the housing market, contributing to its overall health and stability.