Mortgage Market Update

April 2025 Mortgage Market Update – How Lenders Price Rates

If you're buying a property or your current mortgage deal is ending soon, understanding how lenders price their mortgage rates can help you make smarter decisions.

🏦 What Drives Mortgage Rates?

The Bank of England (BoE) sets the base rate, which impacts borrowing costs across the economy. Every six weeks, the BoE reviews and can change this rate in response to inflation, employment, global events, and economic data.

Alongside this, the BoE also manages SONIA (Sterling Overnight Index Average)—a key financial benchmark. SONIA is considered a "risk-free" rate and closely tracks the base rate, currently sitting around 0.05% below it.

Lenders use SONIA to price many of their mortgage products, especially fixed-rate deals.

What Are Swap Rates and Why Do They Matter?

When lenders offer fixed-rate mortgages, they’re taking on a risk. If the BoE raises rates, they still have to lend at the agreed fixed rate.

To manage this risk, they use interest rate swaps—a financial instrument that allows them to swap fixed payments for variable ones (typically SONIA-based). This allows them to lock in profit margins.

Example:

Lender borrows £100M at a variable rate
Lends it as 2-year fixed mortgages at 5%
Secures a 2-year swap rate at 4%
Locks in a 1% margin

If swap rates rise or fall, so too will the pricing of fixed-rate mortgage products.

🌍 What’s Been Moving the Market?

Recent Events Impacting Rates:

Mini-budget (Oct 2024): Caused swap rates to spike from ~4% to nearly 6% in days, leading lenders to pull products
Silicon Valley Bank collapse
Surprise 0.5% BoE hike
Weak UK GDP data
Trump’s April 2025 tariff announcement: Swap rates dropped ~0.3%-0.4% in a week

These kinds of events create major swings in swap markets—and lenders respond by adjusting their mortgage products.

📉 Rate & Housing Market Forecast

Expected BoE Base Rate Path:

Markets now expect three 0.25% cuts in 2025: May, August, November
Base rate could end 2025 at 3.75%
Medium-term outlook: 3–3.5%

Inflation & Jobs:

CPI at 2.8%, nearing BoE’s 2% target
But wage inflation (5.9%) and services inflation (5%) remain sticky
Unemployment at 4.4%, forecast to peak at 4.8% by 2027
Tariffs may pressure certain sectors (automotive, steel, pharma)

House Prices:

Skipton forecasts:
+3% in 2025
+3.5% in 2026
Long-term: 2.5–4% growth p.a.
Market has held up better than expected despite macro headwinds

🔍 What to Watch: Lender Strategies

Different banks have different levels of flexibility when it comes to pricing:

Barclays / HSBC – Strong liquidity; more aggressive pricing possible
Santander / Lloyds – May need to raise funds to scale lending
Nationwide – Likely to have unique hedging due to size and consistency

⚠️ What You Should Know as a Borrower

Swap rates change every second
Lenders set rates based on the live market
Once a deal is submitted, lender treasury teams hedge the rate
Repricing isn't always instant, even when market rates fall
Lenders with old, higher swaps may delay passing savings on
Volatility is expected to continue

💡 How Sarah Grace Mortgages Can Help

If you’re buying or your deal is ending soon, we can:

Search the whole market to find you the best rate
Lock in a deal early and track the market
Switch you to a better deal if rates fall before your mortgage completes

Being proactive with rate changes is key in this volatile market—don’t wait until it’s too late.

Final Thoughts

The mortgage landscape in 2025 is highly dynamic. Swap rates are swinging on political and economic headlines, and lenders are reacting fast. Whether you're buying your first home or refinancing, timing and strategy have never mattered more.

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Can I Get a Mortgage with Less Than 2 Years of Accounts?

By Jordan Nasser • July 24, 2025

Podcast with Dentists Who Invest – Featuring Sarah Grace | CPD Available If you're a self-employed dentist or business owner wondering whether it's possible to get a mortgage with fewer than two years of accounts, you're not alone – and the good news is, you're not without options. Sarah recently joined James Martin on the Dentists Who Invest podcast to explore this very topic. In our discussion, we unpacked the common concerns self-employed professionals face when applying for a mortgage, including: ✅ Whether lenders will consider applicants with only one year of accounts ✅ What documentation you really need ✅ The importance of specialist mortgage advice for self-employed dentists ✅ How timing, planning, and presentation can impact your application If you're early in your self-employment journey or planning to make the switch soon, this episode is packed with practical advice designed to help you get mortgage-ready – without having to wait years to prove your income. 🎧 Listen now : Can I Get a Mortgage with Less Than 2 Years of Accounts? – Podcast Episode 📝 CPD Certificate Available : This episode is eligible for verified CPD, making it a valuable use of your time both personally and professionally.

Why You Should Be Cautious of Financial Advice from Social Media Influencers

By Jordan Nasser • July 9, 2025

In today’s digital world, it’s never been easier to access financial advice. TikTok, Instagram, and YouTube are overflowing with voices promising the latest ‘mortgage hack’. However, as medics, navigating the complexities of income structure, self-employment, and professional obligations, the advice you consume can have serious consequences—especially when it comes from unqualified or unregulated sources. Have you heard of the term “Finfluencers”?! These are social media influencers who share financial tips and insights, often without any formal qualifications or regulatory oversight. Many are charismatic, persuasive, and highly active online. Some even partner with brands or use affiliate links to promote financial products for commission. While some content may be genuinely well-intentioned, the problem is simple: financial guidance is not one-size-fits-all, and the wrong advice can do more harm than good, especially in complex areas like mortgage lending. Why Medics Are Especially at Risk Medics often face a unique set of financial circumstances, such as: Variable income from multiple sources (NHS, private, practice ownership) Complex tax structures (self-employed vs limited company) Eligibility challenges for certain mortgage products Finfluencers rarely understand or even acknowledge these nuances. Their advice is usually generalised and aimed at mass appeal ‘ WHY YOU NEED 3 YEARS TAX RETURNS TO GET A MORTGAGE ’ (sidenote – you do not ), which can mislead professionals like yourself into believing certain strategies are viable when they are not. The Dangers of Unregulated Advice Here’s what makes relying on social media advice risky: No accountability: Most finfluencers are not regulated by the Financial Conduct Authority (FCA), meaning they don’t have a legal duty to ensure their advice is accurate, ethical, or in your best interest. No protection: If something goes wrong, you won’t have access to recourse via the Financial Ombudsman Service or Financial Services Compensation Scheme. Product bias: Many influencers are paid to promote certain financial product, whether or not they’re suitable for your situation. Taking action based on a 30-second TikTok could lead to expensive mistakes, mortgage rejections, or missed opportunities for tax efficiency and long-term financial stability. The Value of Professional Advice As regulated mortgage advisers who specialises in working with medics, we are bound by strict professional standards. This includes: FCA compliance to ensure your best interests are always prioritised Tailored solutions based on a deep understanding of your career path, income structure, and long-term goals Access to lenders who understand your profession and offer more flexible underwriting Ongoing support, not just a one-time post or reel – we always say to anyone that we work with that we want to look after you for your ‘mortgage life’ and not just on a one transaction basis How to Tell the Difference Here are some simple ways to distinguish between a finfluencer and a regulated adviser: