Mortgage rates: Boost for homeowners as average UK mortgage rate hits ‘turning point’

August 13, 2025 Shehroz Malik No Comment 3 Views

atOptions = { 'key' : '935d6ab39f70f5664bb173656c8b20f0', 'format' : 'iframe', 'height' : 250, 'width' : 300, 'params' : {} };

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it’s investigating the financials of Elon Musk’s pro-Trump PAC or producing our latest documentary, ‘The A Word’, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

The average two-year fixed-rate mortgage has dipped below 5 per cent for the first time since before Liz Truss’s mini-budget in September 2022, according to financial information website Moneyfacts.

On Wednesday, the average two-year fixed homeowner mortgage rate was recorded at 4.99 per cent, down from 5.00 per cent the previous working day.

This marks the first time the rate has been below 5 per cent since September 29, 2022, when it stood at 4.87 per cent.

Adam French, head of news at Moneyfactscompare.co.uk, called the move “is a symbolic turning point”.

Mr French continued: “While the cost of borrowing is still well above the rock-bottom rates of the years immediately preceding that fiscal event, this milestone shows lenders are competing more aggressively for business.

“However, while mortgage rates have followed the mood music set by successive cuts to the Bank of England base rate, homeowners and first-time buyers may have to wait longer for more substantial cuts.

Inflation is forecast to spike at 4 per cent in the autumn and not return to its 2 per cent target until 2027 or beyond, which is likely to mean the base rate will hold around its current level for longer.”

The average two-year fixed-rate mortgage has dipped below 5 per cent for the first time since before former prime minister Liz Truss’s mini-budget in September 2022, Moneyfacts said (Joe Giddens/PA)

Ms Truss’s chancellor, Kwasi Kwarteng, announced a spending review in 2022, which included £45bn in unfunded tax cuts and caused turmoil in the UK financial markets.

Mortgage rates surged after the September 2022 statement, delivered as part of a “growth plan”.

On 20 October 2022, the average two-year fixed-rate mortgage hit a peak of 6.65 per cent, amid the market volatility.

Get a free fractional share worth up to £100.
Capital at risk.

Terms and conditions apply.

Go to website

Get a free fractional share worth up to £100.
Capital at risk.

Terms and conditions apply.

Go to website

According to UK Finance, about 900,000 fixed-rate mortgage deals are due to expire in the second half of 2025, with 1.6 million fixed deals having ended or are due to end across the whole of the year.

Recent Bank of England base rate cuts could help to ease cost pressures on some borrowers, with last week’s reduction in the base rate taking it from 4.25 per cent to 4 per cent.

Source link