UK mortgage rates steady ahead of the next Bank of the England rate decision
- Tailor My Property
- Jun 16
- 3 min read
Following the Bank of England’s base rate cut to 4.25% on 8 May 2025 there has been an uptick of activity in the UK property market, largely due to impacted mortgage rates available to buyers.
The average rate for a two-year fixed mortgage stands at 4.89%, according to data from Uswitch, with some sub-4% rates available. Five-year fixed deals currently average 5.14%.
With the next base rate decision taking place on Thursday 19 June analysts predict that the base rate could fall to about 4% by the end of 2025, though this depends on the wider economy and global factors that can be hard to predict, including US tariffs and conflict in the middle east.
What are interest rates and how do they affect the average consumer?
The Bank of England's base rate is what it charges other banks and building societies to borrow money. This influences what they charge their own customers for loans such as mortgages as well as the interest rate they pay on savings. The Bank moves rates up and down in order to stabilise UK inflation, which is the increase in the price of something over time.
When inflation is above the target of 2%, the Bank can decide to put rates up. This encourages people to spend less, reducing demand for goods and services and limiting price rises. When inflation is at or close to the target, the Bank may hold rates, or cut them to stimulate spending and economic growth.
How do interest rates affect mortgage rates?
Just under a third of UK households have a mortgage, according to the government's English Housing Survey, with about 600,000 homeowners of those having a mortgage that "tracks" the Bank of England's rate, meaning that the latest base rate change has an immediate impact on their monthly repayments.
The vast majority of customers with mortgages however have fixed-rate deals, and while their monthly payments aren't immediately affected by a rate change, future potential deals are.
Mortgage rates are currently much higher than they have been for much of the past decade, meaning many homebuyers and those remortgaging have to pay a lot more than if they had borrowed the same amount a few years ago.
Which products are available right now?
As of 14 June 2025 HSBC offers a 4.01% rate for a five-year deal, with the lowest rate being 3.96% for two-year options. Both cases assume a 60% loan-to-value (LTV) mortgage, meaning buyers need to have at least 40% for a deposit.
NatWest's five-year deal is currently at 3.95% with a £1,495 fee, and the cheapest two-year fixed deal is 3.92%. In both instances buyers need at least a 40% deposit to qualify for the rates.
Barclays currently has a five-year fixed rate at 3.99%, with the lowest rate for two-year mortgage deals at 3.97%.
Additionally, the Bank of China is offering non-resident buy-to-let market rates as low as 3.97% for a three-year deal up to £500,000 and 60% LTV.
Though these are just some of many products currently available they do offer a glimpse of the opportunities available to investors and buyers both in the UK and based abroad.
Whether you’re a first time buyer or a seasoned property investor lower rates offer exciting opportunities for the UK property market, particularly with potential further cuts predicted after the next announcement on the 19th. Whether you are planning to expand an already impressive portfolio or explore the market for the first time it’s highly recommended to contact a professional for tailored guidance and advice.
Tailor my Property has a network of expert finance and property professionals who can advise you to ensure you move in the right direction for your personal, financial and property goals.
Comentários