Which bank offers the lowest rate right now?

UK mortgage rates

As of 18 December 2025, the lowest 2-year fixed purchase mortgage rate at 60% LTV in a widely shared best-buy comparison sat with Santander at 3.55%. Money To The Masses
For the same date, the lowest 5-year fixed purchase mortgage rate at 60% LTV in that comparison sat with Barclays at 3.69%. Money To The Masses

That answers the “which bank” question, but there’s a catch, because the lowest rate does not always mean the lowest overall cost once fees enter the chat.

Why rates are falling, and why lenders keep changing the goalposts

The Bank of England cut Bank Rate to 3.75%, published on 18 December 2025, after the MPC vote. wwwtest.bankofengland.co.uk
Inflation also eased, with CPI at 3.2% in the 12 months to November 2025, down from 3.6% in October. Office for National Statistics

When funding costs soften and competition heats up, lenders sharpen pricing, especially for lower-risk borrowers with bigger deposits.

Quick glossary, because mortgage jargon loves to bite

LTV (loan to value): The size of your mortgage compared to the property value.

  • 60% LTV means a 40% deposit.

  • 90% LTV means a 10% deposit.

Lower LTV usually unlocks lower rates, because the lender takes less risk.

Snapshot: lowest fixed rates by deposit level

The deals below come from a market scan published 18 December 2025 and use an example purchase mortgage (rates and fees vary by product and borrower). Money To The Masses

Cheapest 2-year fixes (purchase)

60% LTV (40% deposit)

80% LTV (20% deposit)

90% LTV (10% deposit)

95% LTV (5% deposit)

Cheapest 5-year fixes (purchase)

60% LTV (40% deposit)

For first-time buyers at 90% LTV, a separate December 2025 table (updated 21 December 2025) showed 5-year fixes clustered around the low 4% range, with NatWest, Virgin Money, and Nationwide all very close. HomeOwners Alliance

The trap: the “lowest rate” can cost more overall

Two deals can share a similar rate, but the fee structure can flip the winner. When you compare options, focus on:

  • Product fee (often £999 to £1,500+, sometimes more)

  • Incentives (free valuation, legal fees, cashback)

  • Early repayment charges (ERCs), especially if you might move or remortgage early

  • Follow-on rate after the fixed period

  • Total cost over the fixed term, not just the headline rate

A lender can advertise a “cheapest rate” with a chunky fee that only makes sense on larger loan sizes. On smaller mortgages, a slightly higher rate with a lower fee can work out cheaper.

Where average rates sit, for context

Rightmove’s weekly snapshot (updated 20 December 2025) put average fixed rates around:

  • 2-year fixed average: 4.31%

  • 5-year fixed average: 4.39% Rightmove

It also listed “lowest rates” in the broader market at 3.47% for 2-year and 3.69% for 5-year, which tells you how competitive the best-buy end has become. Rightmove

How to actually get a top-tier rate

Rates are not purely about shopping skills. Underwriters care about risk. If you improve the risk profile, more lenders compete for you.

  1. Push your LTV down
    Even moving from 90% to 85% can open noticeably better pricing.

  2. Tidy your credit profile before you apply
    Reduce utilisation, avoid missed payments, and keep hard searches limited.

  3. Match the term to your plans

  • If you might move soon, a shorter fix can reduce the time you risk ERCs.

  • If you want predictable budgeting, a longer fix often feels calmer.

  1. Compare fee-free vs fee deals based on your loan size
    Fee-heavy deals tend to favour bigger mortgages.

  2. Get an Agreement in Principle early
    It speeds up offers and makes you look more credible to sellers.

What this means for buyers in London, and East London in particular

In London, affordability pressure makes monthly payment planning non-negotiable. Because rates can change between offer accepted and mortgage application, a structured plan helps you avoid last-minute surprises, especially on competitive homes where timelines get tight.

If you’re buying around Whitechapel, Shoreditch, Canary Wharf, Stratford, or the City fringe, the right product choice often depends on how long you expect to hold the property and how likely you are to remortgage before the fixed term ends.

Bottom line

If you simply want the headline answer from late December 2025 research:

However, because fees and incentives can change the true cost, the best deal for you depends on your deposit size, loan amount, credit profile, and how long you plan to keep the mortgage.

Important: Your home may be repossessed if you do not keep up repayments on your mortgage.

Speak to Primeland Property

If you’re buying or selling in London and you want help navigating the process, Primeland Property can guide you through the next steps and, where needed, point you towards regulated mortgage advice.

Primeland Property
124 Whitechapel Road, London, E1 1JE
Tel: 0207 377 5445
Contact Us today

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