Banks battle for mortgages ahead of looming interest rate hike

Britain’s biggest banks are battling for mortgage market share on razor-thin margins even as borrowers rush to remortgage ahead of looming interest rates hikes. The central bank is expected to lift its base rate to four per cent on Thursday its first hike in three years following a sharp resurgence in inflation. The move will deal a blow to the 2.3m households set to reach the end of their fixed-rate deals in 2027, according to figures from trade body UK Finance. Lloyds Banking Group forecasts the Bank will hold rates at four per cent throughout 2027 before easing policy in the second half of 2028. Meanwhile, Barclays projects an average rate of 4.25 per cent in 2028 an upward revision from the 3.75 per cent it pencilled in back in February 2026. It will leave borrowers whose deals expire over the coming year refinancing onto higher rates for far longer than initially hoped. Paul Thwaite, chief executive of Natwest, said “more customers [are] bringing forward remor