Some ‘good news’ for mortgage borrowers despite cap on base rates

Mortgage borrowers can still take some joy from a raft of lenders cutting fixed rates – despite the Bank of England leaving its base rate intact on Thursday, experts have said.

Despite leaving the base rate at 4% on Thursday, there were positive signs as the bank suggested inflation has now peaked – and is expected to decline in the coming months.

bank governor Andrew Bailey He said that before cutting the base rate again, “we need to ensure that inflation is on track to return to our 2% target”.

Alice Hahn, a personal finance analyst at BestInvest by Evelyn Partners, said: “For mortgaged home owners, the key interest rate is unchanged, but the good news is that mortgage affordability has improved for some.

“Five rate cuts since last summer, a more comfortable lending environment, slower home price growth and stronger wage growth have helped ease affordability pressures. Today’s decision to keep rates on hold, however, is coupled with uncertainty over potential property tax hikes in the upcoming Budget “This can be frustrating for both homeowners and potential buyers.”

david hollingworthThe associate director of L&C Mortgages said: “The fact that the outlook for rates has improved has resulted in lower funding costs for lenders and has already driven reductions in fixed rates.

“Most major lenders have cut their rates over the past few weeks, which has helped bring rates back down.

“This means that the expected cut in the base rate is already being priced into certain mortgage deals, while tracker rates will only respond after the base rate cut.”

Matt SmithA mortgage expert at Rightmove said: “We have started to see some lenders becoming more competitive in certain areas of the mortgage market in recent days, and some offering headline-grabbingly cheap rates as they look to secure some final business before the end of the year.”

According to UK Finance figures, 1.6 million fixed mortgages were due to expire in 2025, many of which will have already done so, and 1.8 million deals are due to expire in 2026.

A number of mortgage lenders have launched new rates this week, including Nationwide Building SocietyLloyds and Halifax.

HSBC UK also announced this week that it has introduced a new maximum mortgage loan-to-income (LTI) ratio for its Premier customers, up to 6.5 times annual income.

To qualify for HSBC Premier, customers must have an annual income of at least £100,000 paid into an HSBC Premier account, or hold £100,000 or more in savings or investments with the bank.

Lorna Hopes, mortgage expert at chartered financial advisers Smith & Pinching, said: “Competition between lenders was already heating up before today, and the small print behind the bank’s decision could now highlight the touchstone over the fixed rate price war.”

Francis Huq, chief economist at Santendra UK, said low swap rates had enabled lenders to cut mortgage rates, adding: “We expect the market to continue this positive and upward trend – with house prices continuing to rise modestly until the end of the year.

“Whether we see a base rate cut before the end of 2025 will largely depend on what comes out of the Budget, and whether we see recent positive trends in inflation and wage growth in the upcoming data releases.”

Tony Hall, head of business development at Saffron for Intermediaries, said: “Borrowers may start to have more choice in the coming months if pricing pressures continue to ease.”

Jason Tebb, chairman of OnTheMarket, said: “The vote was close with ratemakers voting by a majority of five to four to keep the rates in place.

“While this will be disappointing news for borrowers who had expected a rate cut this time, it may mean the next cut is not too far away.”

According to Moneyfactscompare.co.uk, the average two-year fixed mortgage rate on the market as of early November 2025 was 4.94%, down from 5.39% a year earlier.

The average five-year fixed-rate mortgage as of November 2025 was 5.01%, down from 5.09% a year earlier.

The typical standard variable rate (SVR), at which borrowers could find themselves when their initial deal expires, was 7.27% at the start of November 2025, down from 7.95% a year earlier.

Francis McDonald, research director at Savills, said: “Although the pace of interest rate cuts has been slower than expected, they will still play an important role in stimulating demand and supporting house price growth over the next five years.

“Combined with more relaxed mortgage rules – which allow some buyers to borrow a larger proportion of their income – and a materially stronger UK economy after 2026, we expect renewed pressure on house prices.

“Our latest forecast predicts average house prices in the UK will rise 22.2% by 2030, with annual growth slowing to 5.0% in 2028 and 5.5% in 2029.”

Amy Reynolds, head of sales at London-based estate agent Antony Roberts, said: “Although many have talked about a market with not much going on, which means we were expecting a very quiet November before the Budget, but that hasn’t been the case. We’ve agreed a large number of sales – mainly freehold homes – with prices reaching £2.5 million.”

Reena Sevraj, which one? The Retail and Money editor said that for savers, now could be a good time to buy, adding: “Many digital banks and building societies are currently offering much more competitive rates than the high street.

“If you’re prepared to keep your money for a longer period of time, now might also be a good time to consider a fixed rate savings bond to lock in a good rate, as it’s possible the Bank (of England) could cut rates at its next meeting.”

Savers have seen rates fall in the last year.

The average easy access savings account in the market paid 2.52% at the beginning of November, down from 3.03% a year earlier, MoneyFacts said.

The average Easy Access Cash Isa paid 2.71% at the start of November, down from 3.24% a year earlier. Moneyfacts’ savings rate analysis was based on someone having £10,000 to deposit.

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Depressed savers who are fed up of seeing their cash dwindle due to inflation may be more inclined to open a fixed rate bond or Isa, with many paying guaranteed returns of 4% or more.

“It is essential to take the time to shop around for the best rates and make the switch from hard work to cash in.”