A rare rate cut against a rising-rate summer
First Direct has cut rates across most of its fixed-rate mortgage range by up to 0.19 percentage points, effective from 2 September, at a point when most lenders have been nudging pricing the other way. The biggest reduction lands on a 95% LTV two-year fix aimed at first-time buyers, now priced at 5.29%. Brokers cannot place any of it: First Direct sells mortgages only direct to the customer, by phone or online, and does not operate through the intermediary channel.
The move stands out against the backdrop of the past two months. Most major lenders have been raising rates rather than cutting them since mid-July, as renewed conflict in the Middle East pushed swap rates higher and squeezed the funding costs behind fixed-rate pricing. First Direct's reduction runs counter to that pattern, at least for now.
Across the rest of the range, first-time buyer and home mover rates start from 4.52% on the two-year fix and 4.54% on the three-year fix, both cut by up to 0.19 points. The two-year fixed remortgage range has been cut by the same margin, with rates now starting from 4.64%, while five-year fixed remortgage products have come down by up to 0.16 points.
Liam O'Hara, head of mortgages at First Direct, said: "We want to empower our customers to fulfil their home ownership dreams, by providing flexible products at the most affordable rate we can. Today, our most significant reductions are on our 95% LTV mortgages as we recognise the importance of supporting customers with small deposits get a competitive rate. We continue to review our pricing daily in order to ensure we remain competitive."
The lender also pointed to features that sit alongside its pricing: unlimited overpayments on any mortgage, a loan-to-income policy allowing eligible customers to borrow up to 5.5 times salary, terms of up to 40 years, and an Agreement in Principle valid for six months. Booking fees start at £490, with no separate charge for advice, and the fee can be transferred to a cheaper rate if First Direct prices further reductions before completion.
None of that changes the access problem for advisers. But it is still worth knowing about, for two reasons. First, first-time buyer clients on tight deposits increasingly shop around online before calling a broker, and a headline 95% LTV rate from a well-known high-street name is the kind of figure that gets raised in a first conversation. Brokers who can explain clearly why the deal is not available through the intermediary channel, and what the closest broker-panel equivalent looks like, are in a stronger position than those caught off guard by the question.
Second, First Direct sits inside HSBC UK, whose own mortgage range is broker-distributed. A cut of this size on its direct-only sibling brand does not guarantee HSBC's intermediary range will follow, but it is a data point worth watching over the coming days, particularly at 95% LTV, where product choice has been tighter than at lower loan-to-value bands for much of this year.
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