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The final months of 2025 are set to be busy for mortgage brokers, with around 446,000 fixed rate deals set to expire – a significant portion of which are two and five year fixes.
Many customers renewing will likely fall into two camps: those who welcome what they consider better terms, and others. Frustrated at how much the cost of borrowing has increased,
The former are households who signed two-year fixed mortgage rate deals when rates rose during the affordability crisis, while the latter include households who signed ultra-low-interest five-year fixes during or just after the COVID-19 pandemic.
In a potentially encouraging sign for mortgage holders, expectations of an interest rate cut before the end of the year got a boost this month when Data showed that inflation stood at 3.8 percent on September. It was estimated to increase by 4 percent.
Ying Tan, chief executive of online mortgage broker Habito, said: Independent: “The market has already anticipated a potential rate cut from the Bank of England this year, and swap rates reflect that cautious optimism. Unless inflation data surprises to the upside, we could see a cut before the end of the year, with mortgage pricing slightly lower as lenders compete for volumes.”
How many renewals and new deals can be sought?
Financial Conduct Authority (FCA) figures show there are a total of 446,169 fixed mortgage deals due to expire in the last quarter of 2025.
They range from sub-2 percent to above 7 percent. interest rates,
Given a five-year fixed rate mortgageAnalysis by money-saving app Nous revealed that an estimated 218,000 homes are set to be lost between October and December.
Around 138,000 people are coming to the end of two-year payments over the same period – they will be expecting a significant drop in repayments.
Greg Marsh, chief executive of Nous, says: “We are seeing an increase in households moving from five-year fixed rate mortgages. The ‘race for space’ during the pandemic and the buying rush during the stamp duty holiday led to a surge in transactions at the end of 2020, with almost half of borrowers taking up longer-term deals which are now expiring.”
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How much might costs change for homeowners?
analysis for Independent By Property Consultancy CBRE provides examples of how costs to borrowers can change. Scott Cabot, the firm’s head of residential research, said:
,mortgage rates There has been a relatively steady decline since the beginning of 2025. They are now significantly lower than they were two years ago, meaning households who are coming to the end of their two-year fixed term can expect to see a reduction in their monthly payments when they renew their mortgage.
The table below shows the average two-year and five-year fixed rates for 75 percent loan-to-value (LTV) mortgage products:
|
2-year fixed, 75% LTV |
5-year fixed, 75% LTV |
|
|---|---|---|
|
31 January 2020 |
1.41% |
1.68% |
|
30 September 2020 |
1.75% |
1.92% |
|
31 January 2023 |
5.14% |
4.66% |
|
30 September 2023 |
5.92% |
5.24% |
|
30 September 2025 (most recent) |
4.19% |
4.18% |
Cabot says: “Importantly, the peak in mortgage rates came in the summer of 2023. As we have just passed its two-year anniversary, this will be a turning point for household finances.”
But rates are now higher for families coming in at the end of the five-year fixed period.
“These households may have secured extremely low mortgage rates in 2020, when base rates were driven historically low to spur more consumer spending and economic growth during the pandemic,” he said.
Looking at potential scenario case studies, CBRE estimates:
- If a borrower has withdrawn Five-year fixed deal of 2.05 percent in October 2020 On a loan of £225,000 against £300,000 PropertyThis would equate to payments of £837 per month. At an average five-year rate of 4.18 per cent from September 2025 they can expect to pay £1,098 per month – or £3,132 more per year,
- If a borrower has withdrawn Two-year deal of 5.6 percent finalized in October 2023 On a loan of £225,000 for a £300,000 property, that would equate to payments of £1,292 per month. At an average two-year rate of 4.19 per cent from September 2025 they can expect to pay £1,099 per month – or £2,316 less per year,
What mortgage conditions look like
According to Moneyfacts, as of October 24, 2025, the average two- and five-year fixed rates stood at 4.97 per cent and 5.02 per cent respectively.
There can be no guarantees as to what lenders will offer in the coming weeks and what rates will look like once the Autumn Budget comes on 26 November, so individuals will need to assess their risk appetite for deals. In the last week, Three major lenders have reduced rates On select deals.
Matt Henderson, head of residential research at estate agents Strutt & Parker, commented: “In an uncertain market, five-year certainty may appeal to some people, particularly those who feel we may have some shocks on the horizon, while those who are more confident in the stability of the market may be able to justify a two-year fix.”
Matt Smith, mortgage expert at property website Rightmove, says: “Those who have reserved the new rates already have certainty. Broadly speaking, financial markets are currently expecting rates to gradually decline over the coming months and into next year. So, in the short term, they may find slightly better rates available, but where possible brokers and lenders should be able to accommodate them in the new year.”
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