25 Jul 2025
When will Mortgage Rates Fall Further?
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on 7th August 2025.
The chief executive of Lloyds Banking Group has said he is expecting two further interest rate cuts to take place by the end of the year, bringing the base rate to 3.75%.
So far in 2025, we have seen two rate cuts, one in February (4.5%), and the other in May (4.25%), but the rate remained the same at the last meeting in June (4.25%).
What does a reduction in rates mean for mortgages?
Interest rate cuts generally mean borrowing becomes cheaper and mortgage payements could reduce.
The average fixed-rate mortgage currently (July 2025):
| July 2025 | |
| Term | Interest Rate |
| Two-year fixed | 4.52% |
Source: Rightmove
The average fixed-rate deal is hugely cheaper than in 2023, as seen below:
| July 2023 | |
| Term | Interest Rate |
| Two-year fixed | 6.39% |
Source: HomeOwners Alliance
However, those who secured rates pre-2021 will notice a jump when their deals come to an end:
| July 2020 | |
| Term | Interest Rate |
| Five-year fixed | 2.25% |
Source: HomeOwners Alliance
Many borrowers who are on fixed-rate deals are protected from any immediate changes, both good and bad. Those with a tracker on a standard variable rate (SVR) will notice an immediate change to their rate.
First-time buyer boost
A reduced rate is good news for those buying their first property, not only will a lower rate encourage first-time buyers onto the property ladder, they are also getting an extra boost thanks to the Chancellor’s Mortgage Reforms. This will allow first-time buyer, with less income to borrow more, offer support for lower-income buyers, will take into consideration rental payments to strengthen their case for affordability.
Recent posts
The top 10 most beautiful villages in the world
10 days ago
Forbes has published a global ranking of stunning locations and one popular picturesque corner of the UK has nabbed top spot.
Over three years after the Mini-Budget took place, we look at what the mortgage market looks like now, showing the difference in mortgage repayments.
The government has announced plans to make buying or selling a home cheaper and quicker with what is being called the “biggest shake-up to the homebuying system in this country’s history.”
More borrowers using equity release
1 Oct 2025
Almost one in five equity release mortgages are now taken out to provide financial support to family.
Buyers purchasing properties sooner
29 Sep 2025
According to industry data, the expected wait for those looking to buy a property has dropped from just over 11 months to less than six months.
It is common for your first mortgage payment to be higher than your subsequent monthly payments for two reasons.
What to do just before you get your keys
24 Sep 2025
Firstly, a big congratulations, you’ve now exchanged contracts! After weeks and months of waiting, you are about to move in. What should you do first?
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
More information
Trusted by
