Are Mortgage Rates Falling?

As far as mortgage rates are concerned, the past few years have been complex ones. We experienced some extreme lows during the COVID period, followed by sharp increases as a result of a former government’s volatile mini budget, which made remortgaging a headache for many at the time. 

However, for the past year or so, it’s felt like things are becoming slightly more affordable for homeowners. Lenders spent 2025 trying to trump each other on value, and, in December, the Bank of England cut the base rate to 3.75%. This begs the question on many homeowners’ and first-time buyers’ lips: Are mortgage rates falling? We’re here to answer that. 

What Is The Bank Of England Base Rate?

The Bank of England base rate is the interest rate that affects how much it costs to borrow money across the UK. Banks and lenders are charged interest at this rate when they borrow money, so it heavily determines the interest rates they pass on to their own customers when offering products like loans, savings accounts, and mortgages.

The base rate is reviewed on a regular basis, with the Bank of England taking into account its outlook on inflation and the wider economy when setting the rate. For example, if economic growth is slow, the base rate might be reduced to encourage people to spend and borrow. 

Current Mortgage Rate Trends

This takes us back to the main question of “are mortgage rates falling?” In short, the answer is yes. Once the Bank of England cut the base rate by 0.25% in December, most lenders cut rates on both variable and fixed-rate products. We’ve seen fixed rates as low as 3.50% in the past month or so, which is the lowest fixed rate available since late 2022. 

While things right now look pretty positive, whether mortgage rates will continue to fall is not something that can be second-guessed. We know how quickly the market can move, and the Bank of England may opt to keep things as they are at the next review in February, which will likely see lenders stand firm. 

How Long Should I Fix My Mortgage For? 

With many lenders now offering rates that are more favourable than previous months, we’re seeing more and more borrowers question how long they should fix their mortgage for. Most are still opting for a 2-year or 5-year fixed rate (particularly in comparison to a variable product), but which is right for you depends significantly on your own personal circumstances and outlook.

Opting to fix for 2 years might be suitable if you are hoping that mortgage rates will continue to fall over the next 2 years, and you anticipate being able to remortgage to a cheaper deal at the end of your fixed term. However, there’s absolutely no guarantee that this will happen, and a 5-year fixed rate might offer better security with certainty over costs for a longer period of time. These are the kinds of considerations you should be making alongside a qualified mortgage adviser before proceeding with any kind of mortgage application, giving you peace of mind that you’ve picked the right option for you. 

Should I Remortgage Now?

With lower mortgage rates available, now is a very sensible time to consider remortgaging. If your current fixed-rate deal is coming to an end or you’re on your lender’s standard variable rate, you will probably be paying more than you need to be. 

Even if your current deal doesn’t end for a few months, now is still a good time to explore your mortgage options. Most lenders will allow you to secure a new rate up to six months in advance, and we’d always recommend seeing what’s available at least this long before the end of your current fixed term. This means that you can lock in a competitive deal now and continue to review the market right up until your completion date, switching again if a better product becomes available. 

Find The Best Rate With Mewstone Mortgage Advice

You should speak to a mortgage adviser sooner rather than later to see if you can make the most of falling interest rates. 

At Mewstone Mortgage Advice, our local mortgage advisers are on hand to help you explore all of your options, whether you’re a first-time buyer hoping to lock in the best possible deal or are remortgaging and want to make sure you choose the right option. We have access to the whole of the market and will regularly search the market to find you the most suitable product, both now and in the future. Simply get in touch via 01752 938933 or book a quick call at a time that suits you.