Mortgage Rate Predictions 2025: Are Mortgage Rates Going Down?

With the mortgage rate outlook improving, many are wondering what this means for their finances. Here is the latest forecast for mortgage rates in 2025 and expectations for 2026, along with the UK interest rate outlook for the next five years.

Bank of England Interest Rate Decision

On 6th November 2025, the Bank of England decided to hold interest rates steady. This decision has raised questions about whether mortgage rates will decrease soon.

Expert Insights from L&C Mortgages

David Hollingworth at L&C Mortgages said on 6 November 2025, “Only a couple of months ago it looked as though homeowners should give up on the chance of another base rate cut before the end of the year. The better-than-expected rate of inflation for September has helped to change that, opening the door to a further rate cut coming sooner than previously forecast.

“The MPC has decided that it’s too soon for that cut to be made on 6 November but the decision was tight at 5-4. That will only further solidify the market’s belief that December will bring another cut, as long as there’s no nasty surprises in the meantime.

“Even though base rate has held there is still good news for mortgage borrowers. The fact that the outlook for rates has improved has already resulted in a reduction to the cost of funds for lenders and there’s been a raft of cuts to fixed rates already.”

What This Means for Borrowers

Homeowners should watch for a probable base rate cut in December, influenced by recent inflation trends.
Despite the current hold on rates, lenders have begun lowering fixed mortgage rates due to improved market conditions.
It is advisable to consider locking in a favorable mortgage rate now and review regularly in case rates fall before refinancing.

Summary

Mortgage rates are expected to decrease soon, with a likely base rate cut in December 2025, offering homeowners a chance to secure lower borrowing costs.

Author's summary: Mortgage rates are poised to fall soon, with signs pointing to a base rate cut this December, benefiting borrowers through lower fixed rates and better lending conditions.

HomeOwners Alliance — 2025-11-06