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NEWS: Are Mortgage Rates Going Down? [December 2025]
The Bank of England has voted to cut the base rate to 3.75% on 18th December 2025.
This move is aimed at supporting economic stability and encouraging growth across the UK. Over the past 12 months, the Bank’s approach has fluctuated in response to inflationary pressures and the broader cost of living crisis. Economic recovery has been slow but steady: the UK economy has grown by 1.4% in 2025 following a small growth in 2024. For homeowners and buyers, the lower base rate offers some relief as borrowing costs start to ease.
The Autumn Budget 2025 adds further context for the property market. Measures such as the new Mansion Tax, increased property income taxes for landlords, and changes to business rates and local tourist taxes create a more complex environment for buyers and investors. While these measures may increase costs or influence affordability, the base rate cut has already begun to prompt lenders to offer sub-4% mortgage rates, providing opportunities for buyers and remortgagers to secure more competitive deals.
Here’s a snapshot of the best mortgage rates on the market currently (updated live), so you can see how the lowest rates are shaping up in the wake of these recent developments:
And to get a free quote today:
Despite the bank rate dropping three times since August 2024, we didn't see significant product rates drops initially, mainly due to the economic uncertainty presented by the Autumn Budget and US Election.
It's common for several legislation changes at once to cause uncertainty, which impacts lender confidence and borrowing costs, but this is usually short-lived.
However, there are now multiple lenders, including Nationwide, offering sub 4% rate mortgages.
While it’s likely that interest rates won’t return to the uber-low levels we saw before 2022, five-year fixes dropping consistently across the board is certainly a sign that there are more reductions to come.
So what does this mean for mortgage rates and affordability going forward?
In this post, we provide expert insight into the latest thoughts from our mortgage brokers, along with insight into what mortgage rates will do next, and how a decrease in mortgage rates could affect your repayments.
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What Caused Interest Rates to Rise Last Year?
How is The Mortgage Market Affected By Interest Rates?
What Mortgage Types Are Most Affected By Interest Rate Changes?
Are Mortgage Rates Going Down Now?
What Do Lower Mortgage Rates Mean for First Time Buyers?
How Can You Find an Affordable Mortgage in 2024?
What Do Our Experts Say?
George Abouzolof
Senior Finance Broker CeMAP
After the 2025 Autumn Budget, the Bank of England has reduced the base rate, signalling increased confidence that inflation is moving in the right direction.
Measures announced in the Budget are expected to place some pressure on household spending, which can help ease inflation over time.
For mortgage borrowers, this shift may start to feed through into pricing, although lenders will continue to respond cautiously to ongoing economic conditions.
Related: Is Switching Lenders Really Worth It?
How is the Mortgage Market Affected By Interest Rates?
Here are 3 tables comparing some of the best mortgage rates available on the market from the past 12 months.
You can see how the mortgage market has changed over the last 24 months, and where the rates sit currently:
November 2025
| Term | Product | Type | LTV | Rate | Subsequent Rate | Product Fee | ERC |
| 2 years | Fixed | Remortgage | 60% | 3.83% | 6.99% | £995.00 | Yes |
| 5 years | Fixed | Remortgage | 60% | 3.89% | 6.74% | £999.00 | Yes |
| 10 years | Fixed | Remortgage | 60% | 4.39% | 6.74% | £999.00 | Yes |
May 2025
| Term | Product | Type | LTV | Rate | Subsequent Rate | Product Fee | ERC |
| 2 years | Fixed | Remortgage | 60% | 3.99% | 7.24% | £999.00 | Yes |
| 5 years | Fixed | Remortgage | 60% | 3.99% | 7.24% | £999.00 | Yes |
| 10 years | Fixed | Remortgage | 60% | 4.49% | 7.24% | £999.00 | Yes |
| Term | Product | Type | LTV | Rate | Subsequent Rate | Product Fee | ERC |
| 2 years | Fixed | Remortgage | 60% | 3.89% | 6.80% | £999.00 | Yes |
| 5 years | Fixed | Remortgage | 60% | 3.79% | 5.80% | £490.00 | Yes |
| 10 years | Fixed | Remortgage | 75% | 4.69% | 5.60% | £999.00 | Yes |
March 2024
|
Term
|
Product
|
Type
|
LTV
|
Rate
|
Subsequent Rate
|
Product Fee
|
ERC
|
|
2 years
|
Tracker
|
Purchase
|
60%
|
4.44%
|
8.74%
|
£0
|
No
|
|
5 years
|
Fixed
|
Remortgage
|
60%
|
4.24%
|
7.99%
|
£490.00
|
Yes
|
|
10 years
|
Fixed
|
Remortgage
|
75%
|
4.63%
|
7.99%
|
£999.00
|
Yes
|
September 2023
|
Term |
Product |
Type |
LTV |
Rate |
Subsequent Rate |
Product Fee |
ERC |
|
2 years |
Tracker |
Purchase |
60% |
5.39% |
8.4% |
£999.00 |
No |
|
5 years |
Fixed |
Remortgage |
60% |
5.12% |
6.9% |
£490.00 |
Yes |
|
10 years |
Fixed |
Remortgage |
75% |
4.91% |
6.2% |
£999.00 |
Yes |
March 2023
|
Term |
Product |
Type |
LTV |
Rate |
Subsequent Rate |
Product Fee |
ERC |
|
2 years |
Fixed |
Purchase |
60% |
4.14% |
7.49% |
£999 |
No |
|
5 years |
Fixed |
Remortgage |
60% |
3.89% |
7.49% |
£999 |
Yes |
|
10 years |
Fixed |
Remortgage |
75% |
4.04% |
7.49% |
£999 |
Yes |
Source: Moneyfacts
When interest rates rise, it becomes more expensive for consumers to borrow money. Naturally, this includes mortgages. Higher interest rates have affected the housing market in a number of ways:
- Lower demand - Higher interest rates can make mortgages less affordable for first time buyers, leading to lower demand for homes.
- Reduced affordability – Rising rates also affect second property buyers and BTL investors. Their mortgage payments could go up, meaning they may need to raise rent to compensate. Or, their projected rent won't meet the affordability for a mortgage on a new investment property, so they don't buy, reducing demand.
What Mortgage Types Are Most Affected By Interest Rate Changes?
If you have a mortgage with a variable interest rate – a rate that closely follows the Bank of England's base rate - you will have seen your mortgage costs go up from 2022-23.
However, if you're on a fixed-rate mortgage, you might have yet to see changes, depending on the length of your term. But you could still be stung when your deal ends and you do remortgage. Currently, many homeowners on the tail end of a low fixed-rate mortgage are waiting with bated breath in hopes that rates will drop before they remortgage to a new deal.
Other property owners are taking the hit and switching to a variable rate in hopes of switching to a cheaper deal later this year.
Monthly increases in mortgage payments have been more acute for those whose fixed-rate mortgages ended and they have automatically switched to their provider's SVR (standard variable rate) – these are typically the most expensive interest rates to pay.
If you're looking to remortgage in 2025, we recommend comparing fixed and tracker mortgages to see which may be more suitable to you and offer the best available deal.
And if you're currently on a very low rate and want to raise additional finance without remortgaging, a second charge mortgage could help you protect your current deal.
Related: What is a Green Mortgage, and how do they work?
Are Mortgage Rates Going Down Now?
Since the Bank of England base rate drop back in August, we have seen rates gradually drop across the board. Fixed rates are beginning to drop under 4% again already, and we could see further reductions depending on whether and when another base rate cut is expected.
Last year, the demand for mortgages was lower, with many prospective buyers holding off until the market was more stable and many would-be buyers simply unable to afford homes amid the elevated costs. Because of this, lenders became more competitive over the smaller mortgage demand, lowering results to attract business.
The current reduction will cut living costs for households across the country, and many financial professionals are optimistic that we'll see another bank rate drop later this year, with mortgage rates to follow.
Related: How bridging loans can help you plug a funding gap and secure your property.
What Do Lower Mortgage Rates Mean for First Time Buyers?
With a potential decline in mortgage rates forecasted, it may be tempting to postpone plans until the lowest rates arrive – this may be true not just for first time buyers, but also those remortgaging.
However, a compromise could be securing a variable rate mortgage, so if rates do go down, you're not missing out.
One piece of positive news for first time buyers is the specialised mortgage products still available – deals tailored to first time buyers specifically - and lower house prices in affordable areas.
The best strategy is to consolidate your finances, understand your borrowing power, and seek a mortgage broker's help to find a deal that best product for you.
How Can You Find an Affordable Mortgage in 2025?
Despite current optimism about declining mortgage rates, deciding on the best option can be daunting and confusing.
We can help you compare mortgage products and their cost to find the best deal based on your specific situation from a wide range of lenders nationwide.
Related: What is a professional mortgage and can you get one?
Expert mortgage advisors have their finger on the pulse of the latest mortgage market news. Whether you're a first-time buyer or looking to refinance or invest in a BTL, we can help you understand your mortgage options so you feel confident you're making the right choice.
To see what we can do for you, give us a call at 0203 900 4322 or book a free consultation below.
