Mortgage rates fall amid uncertainty about Trump's tariffs

Amid growing global economic uncertainty, several UK mortgage lenders are cutting rates in anticipation of sharper interest rate reductions by the Bank of England. The move follows renewed trade tensions sparked by US President Trump’s reintroduction of widespread tariffs, which has heightened fears of a global slowdown.

Several UK mortgage lenders have begun reducing rates, driven by growing expectations that the Bank of England will introduce sharper interest rate cuts this year in response to economic jitters sparked by US trade tariffs.

Coventry Building Society now has its two-year fixed mortgage rate below 4% — the most significant move by a major lender so far. The decision places it among several lenders adjusting their offerings as market sentiment shifts.

Economists and traders now anticipate more aggressive action from the Bank of England this year to counter potential economic fallout. The shift in mood comes after US President Donald Trump reintroduced broad trade tariffs affecting imports from over 60 countries, raising fears of a wider global slowdown.

Data from Moneyfacts shows the average two-year fixed mortgage rate has eased to 5.3%, with the five-year fix down to 5.15%.

Coventry’s updated offer sets its two-year fixed rate at 3.89% until October 2027, but it is limited to borrowers with a 65% loan-to-value ratio and includes a £999 fee. “There is growing demand for shorter-term flexibility in an uncertain market,” said Jonathan Stinton, Head of Mortgage Relations at Coventry Building Society.

Other lenders, including Clydesdale Bank and Newcastle Building Society, have also trimmed rates. The Co-operative Bank has announced it will reduce several of its fixed-rate products — covering two, three, and five-year terms — by 0.14 percentage points. Meanwhile, lenders such as TSB, Metro Bank, and Bank of Ireland have also moved to lower their rates.

Mortgage brokers suggest further cuts could follow over the coming months, especially if the UK's largest lenders — Halifax, Nationwide, HSBC, Santander, Lloyds, and NatWest — begin to significantly adjust their offerings.

Many economists are forecasting four rate cuts from the Bank of England over the next year — double the number predicted before the uncertainty over tariffs.

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