If you’re a first-time buyer or planning to move home in 2025, you’re probably asking yourself one key question: Will UK mortgage rates go down? With the Bank of England base rate sitting at 4.25% following recent cuts, and inflation proving hard to tame, the outlook for mortgage rates remains uncertain, but cautiously optimistic.
A Quick Recap: What’s Happening with Interest Rates?
The Bank of England made two rate cuts in 2025, dropping the base rate from 4.75% to 4.25%. However, at its June meeting, the Bank opted to hold rates steady, signalling a pause while it monitors inflation, which rose to 3.5% in April before dropping slightly to 3.4% in May.
For those planning to move or buy for the first time, this news might feel confusing. After all, falling inflation usually leads to lower interest rates. But with inflation still above the Bank’s 2% target, policymakers are being cautious.
So, will UK mortgage rates go down further this year? Possibly, but timing is everything.
What Do Experts Say About Mortgage Rate Predictions?
Many analysts agree that interest rates have likely peaked, especially after hitting 5.25% in August 2024. In response to cooling inflation and a softer economic outlook, most predictions now suggest further base rate cuts could be on the horizon, just not immediately.
Here are some current expert forecasts:
IMF expects two or three more 0.25% cuts in 2025, potentially bringing the base rate down to 3.75%.
Morgan Stanley predicts a drop to 3.5% by the end of the year.
If these cuts materialise, mortgage rates which currently average around 5.12% for two-year fixes and 5.09% for five-year deals, could gradually fall to around 3.5% to 4%.
For anyone planning to secure a mortgage this year, that could mean more affordable monthly payments ahead, but only if inflation continues to fall.
Will UK Mortgage Rates Go Down for First-Time Buyers?
The short answer: It looks promising, but don’t wait too long.
First-time buyers have been hit hard in recent years. Sky-high borrowing costs, rising house prices, and strict affordability checks have made it harder to get on the property ladder. With rates showing signs of easing, 2025 could bring a turning point, but only if you’re ready to act.
Fixed-rate deals have already improved since 2024, and some lenders are starting to offer more flexible options, such as tracker deals with the ability to switch to a fixed rate mid-term. If you’re just starting your property journey, now is the time to speak with a mortgage adviser to understand your options.
Will UK Mortgage Rates Go Down for Home Movers?
If you’re thinking of upsizing, downsizing, or relocating, this year’s rate environment could offer a rare window of opportunity. As the market begins to stabilise, locking in a rate now might save you money down the line, especially if base rate cuts are delayed.
Many home movers have been stuck on fixed-rate deals secured when rates were higher. If your current deal is coming to an end, you could benefit from switching to a more competitive rate.
Some borrowers are choosing two or three year fixes, which are becoming more attractive than longer five year deals. This flexibility could help you avoid locking in at a higher rate for longer than necessary.
Should You Fix Your Mortgage Rate Now?
This is the big question for many buyers and movers in 2025. With the Bank of England holding off on further cuts for now, there’s a risk that mortgage rates could rise again if inflation creeps up.
Here’s what to consider:
If you’re risk-averse and want certainty over your monthly payments, fixing now could give you peace of mind.
If you think rates will fall again later in 2025, a tracker or short-term fixed rate might be a better fit, especially if your advisor can find a flexible product.
Ultimately, the best option will depend on your circumstances, your appetite for risk, and the advice of a qualified mortgage expert.
What Should You Do With Your Mortgage in 2025?
Whether you’re buying your first home, moving, or looking to remortgage, here’s what you can do to stay ahead:
Understand your current position. Know your mortgage type, rate, and how much time you have left on your deal.
Use mortgage calculators to see how a change in interest rates might impact your repayments.
Speak to an independent mortgage advisor. They’ll have access to the latest deals and can advise on whether to fix now or wait.
Move quickly if you see a good deal. Lenders can pull competitive rates at short notice if they sense change is coming.
So, Will UK Mortgage Rates Go Down in 2025?
The signs point to yes, but not without some bumps along the way. If inflation continues to ease and the economy holds steady, further base rate cuts could bring mortgage rates closer to 3.5% or 4% by the end of the year.
But with market volatility still in play, first-time buyers and home movers should stay informed, act decisively, and get expert advice before making a move.
