by Sam Akbay
Here’s What to Know as Rates Fall
With the Bank of England’s next interest rate decision just around the corner, homebuyers and homeowners alike are wondering: is now the right time to fix a mortgage rate — or should I hold off?
Mortgage lenders have already started trimming fixed-rate deals in anticipation of the Bank of England’s expected base rate cut this week. If you’re considering buying a property or looking to remortgage, this shift could mean real savings — but also some difficult decisions.
Why Are Fixed Rates Coming Down?
The expectation among financial analysts is that the base rate will drop from 4.5% to 4.25%, with further reductions likely throughout the year. Some economists, including those at Barclays, suggest the rate could dip to around 3.5% by early 2026. That’s helped push down the cost of borrowing.
Even though fixed-rate mortgages are more directly influenced by long-term interest rate forecasts (known as swap rates), they still tend to follow the overall direction of the base rate. With financial markets pricing in this downward trend, lenders have already started to respond. In January, top two-year fixed deals were around 4.2%. Now, some of the most competitive lenders are offering rates closer to 3.88%. Five-year fixed deals have also fallen below 3.85%.
What Happens Next?
Most mortgage experts believe rates will continue to ease — but not dramatically. According to leading brokers:
Two-year fixed rates could drop closer to 3.5% by year-end.
Five-year fixes may follow closely behind, but are unlikely to return to the ultra-low levels seen during the pandemic.
Lenders are also under pressure due to slower mortgage approvals and a subdued housing market, so we may see more competitive deals emerge as they compete for business.
Should You Fix Now or Wait?
Here’s what the professionals are advising:
If your current mortgage deal is ending soon (within the next six months), now is a sensible time to secure a rate. Most lenders will let you lock in a deal in advance, and if rates fall further, many will allow you to switch before completion — a win-win scenario.
If you’re still several months away from needing a mortgage, and you’re open to a bit of risk, waiting could bring better deals. But be aware: rates can rise unexpectedly, especially if inflation data or global events shift sentiment.
Tracker mortgages may also be worth exploring. These variable-rate deals tend to have lower fees and fewer penalties, making them a flexible option for those who think rates will fall faster than predicted.
Ultimately, the decision comes down to your personal situation. If you’re budget-conscious and value predictability, a fixed-rate mortgage offers peace of mind. If you can tolerate some uncertainty and are keen to benefit from potential future cuts, a tracker may suit you better.
Current UK Mortgage Rates – May 2025
| Mortgage Term | Best Available Rate | Average Market Rate | Typical Monthly Repayment¹ |
|---|---|---|---|
| 2-Year Fixed | 3.75% | 4.69% | £1,304 |
| 5-Year Fixed | 3.83% | 4.63% | £1,198 |
Based on a £200,000 mortgage over 25 years.
Key Insights:
Best Rates: The most competitive two-year fixed rate is currently at 3.75%, while the best five-year fixed rate stands at 3.83%.
Average Market Rates: The average two-year fixed mortgage rate is 4.69%, and the average five-year fixed rate is 4.63%.
Monthly Repayments: For a £200,000 mortgage over 25 years, the typical monthly repayment would be approximately £1,304 for a two-year fixed rate and £1,198 for a five-year fixed rate.
Note: Mortgage rates can vary based on individual circumstances, including credit history, loan-to-value ratio, and lender criteria. It’s advisable to consult with a mortgage advisor to find the most suitable deal for your situation.
Our Advice at Sam Akbay Property Agency
Whether you’re buying your first home, expanding your property portfolio, or remortgaging your existing home, we always recommend speaking with a trusted mortgage broker who can tailor advice to your circumstances.
In this shifting financial climate, locking in a rate now — while keeping an eye on better deals — might just be the smart middle ground.
Need help finding a mortgage broker? We work with a network of trusted partners and are happy to introduce you.If you need assistance in finding a reputable mortgage broker or have further questions, feel free to reach out to us at Sam Akbay Property Agency. We’re here to help you navigate the mortgage landscape with confidenc
