Mortgage Rates Deep Dive 2025
With about a third of homes in the UK being on a mortgage and residential mortgage loans standing at over £1678.2 billion as of March 2025, mortgages have a huge bearing on the housing market.
Available mortgage rates can change how often people think about moving, as well as the affordability of doing so. In recent years, particularly in 2023 when an average two-year fixed mortgage hit an average of 6.66%, mortgage rates in the UK have climbed to their highest since 2008.
So, what’s the mortgage rate situation in 2025? We’ve looked into the current mortgage rates situation, as well as how this is likely to change across the year and how this affects those either looking for a first-time mortgage or to remortgage.
What do the latest mortgage rates look like?
As of March 2025, the average mortgage rate on a two-year fixed rate mortgage was 4.88%, with the average five-year fixed rate mortgage being 4.74%. A small decrease in rates from the previous year.
Despite this decrease, mortgage rates are still much higher than they’ve generally been over the last ten years, especially in 2020 when the COVID-19 pandemic led to a sharp drop in rates as the house market drastically slowed down and the Bank of England put emergency measures into place.
What factors are affecting mortgage rates today?
The biggest influencing factor on mortgage interest rates in the UK is the Bank of England’s base rate. This is the rate that the Bank of England charges financial institutions and banks for lending. As a result, when this rises or falls, the bank’s rate is likely to rise and fall with it.
The Bank of England sets its rate based on several other factors. These include the rate of inflation, how the UK’s economy is growing and the rate of employment The rate has also been affected by geopolitical factors such as the COVID-19 pandemic and the war in Ukraine, which have contributed to rising energy prices, supply chain disruptions, and other economic challenges.
There are, of course, more factors that can affect mortgage interest rates beyond just the Bank of England base rate. While that rate generally directly dictates whether rates go up or down, the lenders themselves will then base the rates they offer on individual factors and their own risk assessments. For instance, the outcome of an affordability assessment or if you have a large deposit to put down, known as loan-to-value (LTV).
Are mortgage rates rising or going down in 2025?
It’s unlikely mortgage rates will return to the lows of 2020. In fact, it’s suggested that the expected ‘normal’ rate will now sit around 4%. With that figure in mind, 2025’s mortgage rates have begun to decrease down towards that figure and are expected to head in a positive direction.
The Bank of England stated in March 2025 that they raised interest rates in 2021 to curb inflation. Since then, inflation has fallen, allowing them to lower interest rates. However, they did make it clear that they can’t specify when, or by how much, they’ll reduce interest in the future as it all depends on how the UK’s financial situation evolves.
Which lenders are offering the best mortgage rates?
Finding the best mortgage rates amongst a wide array of lenders and deals can be a challenging task. There are no guarantees when it comes to finding a mortgage, so shopping around, and potentially speaking to an advisor, is very important.
We’ve put together a selection of rates (as of March 2025) from some of the UK’s biggest lenders. This is just a small selection to give an example of rates at the start of 2025, there are many more out there both with these lenders and others. Some of these deals may also incur arrangement fees on top of the rate shown.
Halifax Mortgage Rates
2-year fixed-rate mortgages around 4.36% to 4.71% based on 60% LTV.
5-year fixed-rate mortgages around 4.18% to 4.39% based on 60% LTV.
2-year tracker mortgages around 5.02% based on 60% LTV.
Barclays Mortgage Rates
2-year fixed rate mortgage at 4.11% based on a maximum 60% LTV.
5-year fixed rate mortgage at 4.06% based on a maximum 60% LTV.
Green Home 5-year fixed rate mortgage at 3.96% based on 60% LTV.
Santander Mortgage Rates
2-year and 5-year fixed-rate mortgages at 3.99% based on a maximum 60% LTV.
10-year fixed-rate mortgage at 4.44% for new purchases and 4.60% for remortgages
based on a maximum 60% LTV.
How will mortgage rates affect my house sale?
Mortgage rates and the ability to get an affordable mortgage offer can be one of the leading factors in house chain collapse. Once you’ve secured your offer, you’re dependent on your buyer being approved for a mortgage and receiving their own offer.
Unfortunately, if they can’t get approved, it can lead to the house chain collapsing. With a trusted property buyer like Good Move, you can avoid the uncertainty of mortgage rates on your house sale. Through our experienced team of fully qualified surveyors and property experts and a cash house buyers quote, you can sell your house quickly.
