Mortgage rates could fall again before the end of June as competitive pressure mounts on lenders to follow the lead of Barclays and NatWest.

This is according to Sam Fox, founder of the UK Mortgage Centre. 

He says a combination of falling funding costs, intensifying competition, and seasonal demand is creating conditions in which lenders “can’t afford not to act.”

He points to five factors driving the expected movement:

Swap rates have fallen sharply. Two-year swap rates — the benchmark that determines what lenders pay to fund fixed-rate mortgages — have dropped by almost 20 basis points over the past month. Five-year swaps have fallen by around 15 basis points. When funding costs ease, lenders gain room to reduce rates while maintaining their margins.

Lenders cannot afford to become invisible. When Barclays launched a two-year fixed rate at 4.39 per cent, it positioned itself near the top of broker sourcing systems nationwide. Rival lenders whose rates sit significantly above the market risk losing broker recommendations — and the applications that follow. “In my experience, lenders hate becoming invisible” says Fox.

Summer is peak season. The housing market typically accelerates in the summer months as buyers aim to complete before autumn and homeowners shop for better remortgage deals. Lenders are aware of the opportunity and historically sharpen their pricing to compete for it.

The remortgage battle is intensifying. NatWest recently reduced selected tracker remortgage rates by more than half a percentage point — a move Fox describes as “a lender making a statement.” Remortgage customers are among the most valuable in the market: proven borrowers actively seeking a new deal. When one lender moves aggressively in this space, rivals tend to respond quickly.

Higher loan-to-value lending is opening up. Borrowers with five or ten per cent deposits have faced stubbornly high rates for much of the past two years. Recent reductions from major lenders suggest competition is now reaching this segment too — offering potential relief to first-time buyers who have been priced out or stretched by affordability calculations.