Mortgage Rates UK 2025: Current Rates, Trends & Predictions

Introduction

Mortgage rates in the UK have become one of the biggest financial concerns for homeowners and first-time buyers. With the Bank of England base rate at 4% and lenders competing for customers, borrowers are asking:
• What are the current mortgage rates in the UK (2025)?
• How do rates differ for 2-year vs 5-year fixed mortgages?
• Will rates fall in 2026 — or remain high?

This guide offers a complete overview of UK mortgage rates, including today’s averages, historical trends, future predictions, and tips on getting the best deal.

Current Mortgage Rates UK (2025)

As of September 2025:
• Bank of England Base Rate: 4%
• 2-Year Fixed Rate Mortgages: around 3.75%–4.20% (depending on LTV and credit score)
• 5-Year Fixed Rate Mortgages: around 3.89%–4.25%
• Tracker Mortgages: typically base rate + 0.5%–1.5% (so ~4.5%–5.5%)
• Standard Variable Rate (SVR): often 6%–7%

Best deals are generally for borrowers with a 40% deposit (60% LTV).

Factors That Affect UK Mortgage Rates

1. Bank of England Base Rate
   • The base rate (currently 4%) directly influences tracker mortgages and indirectly affects fixed deals.
2. Inflation
   • Higher inflation → higher base rate → higher mortgage costs.
   • If inflation falls, rates are more likely to ease.
3. Loan to Value (LTV)
   • Lower LTV (bigger deposit) = lower risk for banks → cheaper mortgage rates.
   • Higher LTV (small deposit) = higher rates.
4. Borrower Credit Score
   • Strong credit = better deals.
   • Poor credit = higher rates and fewer options.
5. Mortgage Type
   • Fixed: stability but higher fees upfront.
   • Tracker/Variable: flexibility but risk of rising payments.
6. Lender Competition
   • Lenders compete with new deals; some cut rates below 4% for low-risk borrowers.

Fixed vs Variable vs Tracker Mortgages

Mortgage Type How It Works Pros Cons
Fixed Rate Interest rate fixed for 2, 3, 5, or 10 years Stability, easier budgeting May pay more if rates fall
Variable Rate (SVR) Set by lender, can change anytime Flexibility, no tie-in after deal ends Often very high
Tracker Follows Bank of England base rate + % Transparent, can benefit if rates fall Payments rise if base rate increases

Historical UK Mortgage Rates

• 2008 (Financial Crisis): Rates ~6%+ before base rate cuts.
• 2010–2019: Historically low mortgage rates (1.5%–3%).
• 2020 (Pandemic): Base rate cut to 0.1%, mortgages below 2%.
• 2022–2023: Sharp rises due to inflation → mortgage rates above 6%.
• 2024–2025: Stabilised around 3.75%–4.25% for fixed deals.

Mortgage Rate Predictions for 2025–2026

• Short Term (late 2025): Rates expected to remain stable around 4%.
• 2026 Outlook: If inflation keeps falling, base rate could be cut → fixed mortgage rates may dip towards 3.25%–3.50%.
• Longer Term: Rates unlikely to return to 2020 lows (<2%), but steady mid-3% range is possible.

How to Get the Best Mortgage Deal

1. Save a bigger deposit – aim for at least 15%–25% to unlock better rates.
2. Improve your credit score – pay bills on time, reduce debts.
3. Use a mortgage broker – they access deals not always visible online.
4. Compare lenders – banks, building societies, and challenger lenders offer different packages.
5. Consider fixed terms – if you want certainty, 5-year fixed deals are popular in 2025.
6. Watch fees – low interest rates can hide high arrangement fees.

❓ FAQs About UK Mortgage Rates

1. What are current UK mortgage rates?
   Around 3.75%–4.20% for fixed deals (Sept 2025).
2. What is the Bank of England base rate?
   It is 4% in 2025.
3. Is it better to fix for 2 or 5 years?
   • 2-year deals are slightly cheaper now.
   • 5-year deals offer stability against future rises.
4. Will mortgage rates go down in 2026?
   Yes, possibly — if inflation falls, lenders may cut rates slightly.
5. Can I get a mortgage with poor credit?
   Yes, but expect higher rates and fewer options.
6. What is the average SVR in the UK?
   Around 6%–7%.
7. What’s the best way to find the cheapest mortgage?
   Use a broker and compare multiple lenders.

Conclusion

Mortgage rates in the UK have stabilised in 2025 after the sharp rises of recent years. With the Bank of England base rate at 4%, typical fixed mortgage deals sit between 3.75% and 4.25%.

The best deals go to borrowers with large deposits and strong credit scores, but even higher-LTV buyers have more choice than in 2023.

Looking ahead, rates are expected to remain stable, with the potential for modest cuts in 2026. For borrowers, the key is to plan ahead, shop around, and lock in stability where it suits their budget.

To Read More; Click here