Mortgage Rates Fall To 18-Month Low — What It Means For UK Borrowers

UK mortgage rates have dropped to their lowest overall level in 18 months, as lenders cut fixed deals and competition intensifies. This easing offers a window of opportunity for homebuyers, remortgagers and landlords to secure more affordable borrowing before any potential reversal.

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What Is Driving Lower Mortgage Pricing

The decline in mortgage rates reflects a combination of lower funding costs for lenders, softer demand and increased competition on high-street deals. Data compiled in early November 2025 shows that the “average UK mortgage rate” dipped below 5 per cent for the first time in months.

Meanwhile, leading lenders are offering competitive 2- and 5-year fixed deals to attract borrowers — and the availability of low-deposit products, including 90 % and 95 % loan-to-value (LTV) mortgages, is increasing.

Bank of England Base Rate and Market Expectations

Although the Bank of England held its Base Rate at 4.00% on 6 November 2025, markets have grown more confident that a cut may come at its next review in December — adding downward pressure on mortgage costs.

Because many fixed-rate mortgages are priced in part on “swap rates” and wholesale funding costs — which have softened — lenders appear increasingly willing to pass savings on to borrowers.

What Typical Deals Look Like Now

According to recent data:

• The average two-year fixed rate (75% LTV) has fallen to around 4.66%.

• Five-year fixed deals are near 5.03%.

• For borrowers with smaller deposits, some lenders now list fixed-rate mortgages at or just above 4.5%, depending on LTV and fees.

What This Could Mean For First-Time Buyers, Remortgagers And Buy-to-Let Landlords

For those entering the market or remortgaging soon, current conditions could offer meaningful savings:

• First-time buyers: Lower fixed deals and competitive higher-LTV products may improve affordability and reduce monthly payments.

• Remortgagers: If your existing fixed term is ending soon, it could be a favourable time to lock into a better rate rather than revert to a higher standard variable rate.

• Buy-to-let landlords: Reduced fixed rates might ease financing costs, helping returns — though landlords should still account for potential void periods, maintenance and other costs.

Risks And What Borrowers Should Watch

• Fixed rates, though falling, remain above the ultra-low rates seen in previous decades.

• If inflation resurges or wholesale funding costs rise again, lenders may tighten margins, making future deals less generous.

• If you go with a tracker or variable mortgage, your repayments remain vulnerable to changes in the Bank of England Base Rate or lender standard variable rates.

Key Numbers (as of early November 2025)

• Bank of England Base Rate: 4.00%

• Average UK mortgage rate: just under 5%

• Typical 2-year fixed (75% LTV): 4.66%

• Typical 5-year fixed: around 5.03%

Figures as of 3 November 2025, London.

The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you’d like to understand what these moves could mean for you, speak to Mortgage One

Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.

FAQs

1. Are current mortgage rates the lowest in years?
   Not compared with the exceptionally low rates seen during the pandemic, but at just under 5% on average, they are the lowest in roughly a year and a half for most standard fixed deals.

2. If Bank of England Base Rate stays at 4%, can mortgage rates still drop?
   Yes. Mortgage pricing depends not only on Base Rate but also on wholesale funding costs and competition — which have been easing lately.

3. Should I fix my mortgage now or wait?
   Fixing could be sensible if you're risk-averse and want certainty over monthly payments. But if you expect further rate falls and are comfortable with uncertainty, waiting could pay off — though that’s speculative.

4. Do the better deals apply to high loan-to-value mortgages (small deposit)?
   Some lenders have reintroduced competitive offers for 90% or even 95% LTV, though rates and fees tend to be less favourable compared with lower-LTV deals.

5. How often could these rates change again?
   Lenders review and reprice offers frequently — weekly or even daily. Changes in funding costs, Bank of England decisions, and lender competition can all shift mortgage rates.