The cost of borrowing money to buy a home is “unlikely” to return to the low levels seen over the past decade, the boss of the UK’s largest mortgage lender has said.

Charlie Nunn, chief executive of Lloyds bank, said the bank expected mortgage rates to come down, but not to the near-zero rates they were during the 2010s.

The rate charged on new fixed mortgage deals has risen in recent years as a result of an increase in interest rates to try to slow soaring price rises, sparked by the Covid pandemic and Russia’s invasion of Ukraine.

And while they have fallen recently after a cut in interest rates, brokers have warned the trend could come to “an abrupt halt”.

On Friday, the average two-year fixed mortgage rate was 5.36%, according to financial information company Moneyfacts. A five-year deal was 5.05%.

Asked on the BBC’s Sunday with Laura Kuenssberg programme if “cheap” mortgage deals were ever going to come back, Mr Nunn said: “We do think they [mortgage rates] are going to continue to come down, but getting back to the level we saw in the last decade where interest rates were down at zero I think is unlikely.”

Mr Nunn said the increase in borrowing costs had been “really challenging” for homeowners, but pointed out only about 40% of UK properties have a mortgage.

He added that the average income of a family with a mortgage was £75,000, and so “many of those families have been able to absorb” higher repayments.

“Mortgage arrears, people struggling with their mortgages, have actually been declining again since December,” he told the BBC.

High interest rates can affect people in different ways. Mortgage holders with variable or tracker mortgages, or those who are looking to secure new fixed-rate deals, have faced higher monthly payments.

But first-time home buyers looking to get on the market have found it more difficult to get onto the ladder, being priced out as it’s become harder to secure an affordable deal.

An estimated 1.6 million existing borrowers have relatively cheap fixed-rate deals expiring this year.

The UK’s base interest rate, which dictates the borrowing costs charged by banks and building societies on loans, is currently 5%.

The rate was held at its current level last month, with decision makers arguing they needed to be sure inflation, which measures the rate consumer prices are rising at over time, was remaining at normal levels.

Mr Nunn said while there were many parts of the UK “continuing to struggle” due to the cost of living, 2024 had marked “the turn that we have seen in terms of most people in the country feeling more financially secure”.

“For most people it has got a lot better,” he said. “There is more savings in deposit accounts, there’s less people struggling with loans and actually business confidence is at a nine-year high.”

Separately, Mr Nunn accused Meta, the tech giant which owns social media platforms Facebook and Instagram, of “enabling” people to be contacted by fraudsters running online scams.

He said: “80% of financial fraud in the UK is occurring through the big tech companies – almost 70% through one company, Meta, through its Facebook marketplace, the Facebook platform and the Instagram platform.”

“They’re ones that are enabling customers to be contacted by fraudsters and to be able to be messaged so they are encouraged to send payments, which aren’t safe,” he added.

“I listen to calls and hear what people are going through when they experience fraud and we need to do more to protect customers, not just compensate them.”

Meta said in response that its “pilot Fraud Intelligence Reciprocal Exchange programme (FIRE)” was designed to enable banks to “share information so we can work together to protect people using our respective services”.

“Fraud is a multi-sector spanning issue that can only be addressed by working collaboratively. We encourage banks including Lloyd’s Bank to join in this effort,” a statement said.

• Make overpayments. If you still have some time on a low fixed-rate deal, you might be able to pay more now to save later.
• Move to an interest-only mortgage. It can keep your monthly payments affordable although you won’t be paying off the debt accrued when purchasing your house.
• Extend the life of your mortgage. The typical mortgage term is 25 years, but 30 and even 40-year terms are now available.

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