Mortgage Market Update

Bank of England Base Rate Cut to 4.00% – What It Means for Mortgage Borrowers

The Bank of England has reduced the base rate from 4.25% to 4.00%—its second cut of 2025. This move signals a gradual shift in monetary policy as inflation continues to ease and the economy shows signs of strain.

This decision reflects:

Continued softening of inflation (latest CPI at 2.4%)
Slowing but elevated wage growth (5.6%)
Rising unemployment (now at 4.6%)
Ongoing global and domestic economic pressures

Markets still anticipate a further cut in November, but the Bank is proceeding cautiously.

Why Mortgage Rates Aren’t Falling by 0.25%

While a base rate cut often makes headlines, it doesn’t translate directly into lower fixed-rate mortgage deals. Lenders use a more complex set of tools to price their products, and base rate changes are only part of the story.

How Lenders Price Mortgage Rates

When setting fixed-rate mortgages, lenders primarily look at:

1. SONIA (Sterling Overnight Index Average):
SONIA closely tracks the Bank of England base rate and reflects the cost of short-term borrowing. It influences how lenders fund certain mortgage products.

2. Interest Rate Swaps:
Swap rates are the key driver of fixed mortgage pricing. These are financial instruments lenders use to hedge risk when offering fixed-rate deals. They reflect market expectations for future interest rates over a set period (e.g. two or five years).

An Example:

A lender offering a 2-year fixed mortgage wants to protect its margin if interest rates rise. It can enter into a swap that locks in its cost of funds based on current 2-year swap rates. If the 2-year swap rate is 4% and the lender offers a mortgage at 5%, they lock in a 1% margin.

As swap rates fluctuate daily in response to inflation data, central bank commentary, and global events, so too do the mortgage rates offered by lenders.

Swap Rate Movement – Limited Response

Although the Bank of England cut the base rate today:

2-year swap rates fell by approximately 0.08%
5-year swap rates remained flat

This muted reaction is due to the market having already priced in this move. Ongoing concerns about inflation and wage growth are also limiting expectations of further aggressive cuts.

Lender Reaction – Who’s Moved?

Several major lenders have made small changes:

Barclays and HSBC have trimmed selected fixed rates by 0.10–0.15%
Halifax and Nationwide have released targeted reductions this week
Santander and NatWest have been more reserved, with fewer pricing changes so far

As we move further into August, more lenders may adjust pricing—especially if competition increases or swap rates ease further.

Will Rates Keep Falling?

Even with a base rate of 4.00%, we’re unlikely to see a rapid or dramatic drop in mortgage rates.

Several reasons for caution remain:

Swap rates remain above their pre-October 2024 levels
Services and wage inflation are still higher than the Bank would like
Global events—such as US tariffs and a slowing Chinese economy—could weigh on market confidence

This means we may see modest, selective reductions, but not a return to the ultra-low rates seen in past years.

What Borrowers Should Consider

If your current deal ends in 2025 or you're planning to buy:

Secure a rate now:
Lenders are repricing cautiously, and rates can change with little notice.

Stay on top of the market:
Rates shift daily. Some lenders move weekly, others react to market signals more slowly. Working with a broker ensures you don’t miss opportunities.

Ask about rate switches before completion:
Many lenders allow you to switch to a lower rate if one becomes available before your mortgage completes.

How Sarah Grace Mortgages Can Help

We’re currently helping clients to:

Lock in competitive rates early
Monitor the market for rate improvements
Take advantage of early switch opportunities
Understand the differences between lender strategies

With ongoing market uncertainty, timing and attention to detail are key. We stay on top of the live market so you don’t have to.

Final Word

The base rate cut to 4.00% marks a further step in the Bank of England’s pivot toward easing, but fixed-rate mortgages remain tethered to swap market behaviour. While pricing is improving slowly, it’s not guaranteed—and volatility continues.

Borrowers who act early, understand how rates are priced, and work with an expert broker will be best positioned to secure value in this changing landscape.

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Bank of England Holds Base Rate at 4.00% - What It Means for Mortgage Borrowers

By Jordan Nasser • November 9, 2025

Bank of England Holds Base Rate at 4.00% - What It Means for Mortgage Borrowers The Bank of England has held the base rate at 4.00%. Find out what this means for mortgage holders, first-time buyers, and those remortgaging - plus what could happen next for UK interest rates. Bank of England Base Rate Remains at 4.00% The Bank of England’s Monetary Policy Committee (MPC) has voted to hold the UK base rate at 4.00% - maintaining its cautious stance as inflation remains above target and economic growth stalls. While the decision was widely expected, it carries major implications for mortgage borrowers , homebuyers , and anyone planning to remortgage in the next year. Why the Bank of England Held the Base Rate Despite progress in lowering inflation, the BoE remains concerned about lingering price pressures. Inflation is currently around 3.8% , still well above the 2% target . Wage growth continues to fuel inflationary risks. The UK economy is showing signs of weakness, with flat GDP growth and slowing consumer spending. In short, the Bank wants to avoid cutting too early and reigniting inflation - but also doesn’t want to push the economy into recession. Holding at 4.00% keeps the balance between stability and caution. What This Means for Mortgage Borrowers Tracker and Variable-Rate Mortgages If you’re on a tracker or variable-rate mortgage , your monthly repayments will remain unchanged - for now. However, interest costs remain much higher than before 2022, and rate cuts are unlikely in the short term . Borrowers should plan for elevated repayments through 2025 and possibly into 2026 . Fixed-Rate Mortgages Even though the base rate hasn’t changed , fixed-rate mortgage pricing depends on swap rates - market indicators that reflect expectations of future BoE decisions. Lenders have made small reductions in some fixed-rate deals. The best 5-year fixed deals are now hovering around the mid-4% range , depending on loan-to-value. The outlook remains uncertain, so those nearing the end of their fixed deal should start exploring remortgage options early. First-Time Buyers and Remortgagers For first-time buyers , this rate hold means relative stability in borrowing costs, but it’s not yet time to expect major rate drops. Remortgagers should act early - ideally six months before their current deal expires - to secure competitive rates. Working with a mortgage broker can make a big difference in finding the best offers as markets fluctuate. What Could Happen Next with UK Interest Rates The BoE has been clear: rate cuts will only come once inflation is firmly under control . Markets currently expect the first cuts to begin in mid-2026 , though this could shift depending on economic data. Key indicators to watch include: Inflation , particularly in services Wage growth and unemployment rates Market swap rates , which directly affect fixed-rate mortgage pricing If inflation continues to cool and the economy slows further, gradual rate cuts could begin. But the Bank of England is prioritising long-term stability over short-term relief. Key Takeaways for UK Mortgage Borrowers Base rate unchanged at 4.00% following the latest MPC meeting No change for tracker or variable-rate mortgage repayments Fixed-rate mortgage rates may edge down slightly as markets adjust Rate cuts are expected to be gradual - not immediate Borrowers should budget for higher repayments throughout 2025 Final Thoughts The Bank of England’s decision to hold the base rate at 4.00% signals a steady but cautious phase for the UK economy. For mortgage borrowers , this means stability at elevated levels - and the importance of preparation over panic . Whether you’re buying, remortgaging, or simply reviewing your finances, staying informed about inflation trends and lender movements will be key to making smart mortgage decisions in the months ahead.

Mortgage Market Update - November 2025

By Jordan Nasser • November 3, 2025

Crunching numbers with a cuppa – because mortgages don’t have to be boring! Autumn Leaves & Market Moves As the clocks go back and the evenings draw in, the mortgage market is settling into its own seasonal rhythm. October gave us plenty to think about – a mix of cautious optimism, flickers of rate reductions, and lenders testing the waters. So what’s next for November? Let’s unwrap it. Fixed Rates: A Mixed Bag (But Some Good News Brewing) The Bank of England base rate remains steady at 4.00% , and while that number grabs headlines, it’s swap rates (what lenders use to price fixed deals) that really set the tone. Lately, those swap rates have wobbled – but the overall trend looks to be softening. That means we might soon see some lenders trimming their fixed-rate products again after the autumn blip. If your current deal ends within the next six months, it’s a great time to get options lined up — we can help lock something in now and keep an eye open in case rates improve before completion. Housing Market: Finding Its Feet The property market isn’t roaring, but it’s far from flat. UK Finance predicts a 10% rise in purchase lending this year , suggesting cautious confidence is returning. Buyers are still price-sensitive, but improved affordability (and some sellers adjusting expectations) are helping keep things ticking over. If you’re thinking of moving in the new year, now’s the perfect time to start planning. Policy & Tax Watch There’s plenty of chatter around potential stamp duty tweaks and landlord tax relief reviews — but as of early November, nothing concrete has been confirmed. It’s tempting to wait for big announcements, however in our experience, timing your mortgage or move purely on “maybe” policy changes can backfire. Focus on what you can control — your budget, goals, and timeline — and we’ll navigate any updates as they come. What to Watch This Month Keep an eye on these key events shaping the market: Bank of England MPC Meeting – 6th November The tone of this meeting will influence expectations for any spring 2026 rate moves. Even a hint of softer inflation language could encourage lenders to act. Swap Rates & Gilt Yields The unsung drivers behind fixed mortgage pricing. A small dip here could mean cheaper rates by December. Lender Competition Expect a few “rate war” headlines as banks jockey for year-end business. If one major player cuts, others often follow. Our Quick Tips for November Remortgagers: Check your deal expiry. Six months’ notice gives us maximum flexibility. First-time buyers: Don’t be disheartened by headlines – many 90–95% deals are still available. Landlords: Review yields carefully; some lenders are loosening criteria for limited-company buy-to-let. A Friendly Final Word November feels like a month of “nearly there” for the mortgage world. The ingredients for a brighter market are simmering away – falling inflation, stable rates, and lenders re-entering the fray. Our advice? Plan ahead, stay informed, and don’t wait for perfect timing – it rarely exists. Whether you’re exploring options, preparing to remortgage, or dreaming of your first set of keys, let’s chat and make a plan that works for you.

What the Renters Rights Act 2025 means for landlords

By Jordan Nasser • October 28, 2025

The Renters’ Rights Act 2025 has officially become law — and it’s set to change the way landlords let and manage property across England. While most of the new rules will come into force during 2026, now’s the perfect time to prepare and understand what’s coming. The big changes landlords need to know 1. Goodbye to Section 21 “no-fault” evictions The biggest headline: Section 21 is being scrapped. All tenancies will eventually move to periodic (rolling) agreements, meaning landlords can only end a tenancy for specific, lawful reasons — such as selling the property or wanting to move back in. It’s a huge shift, so get ready to adjust how you plan notice periods and tenant management. 2. End of rent-bidding wars You’ll no longer be able to accept offers above the listed rent. The goal is to create a fairer, more transparent market — and it’ll be up to landlords and agents to stick to the advertised figure. 3. Raising property standards A new “Decent Homes” standard is being introduced for the private rented sector, aligning with what’s already in place for social housing. That means tighter rules around damp, mould, and basic living conditions. Many of these expectations are already familiar to professional landlords, but enforcement will become more consistent and more visible. 4. Transparency and accountability Two new systems are on the way: A Private Rented Sector Ombudsman, allowing tenants to raise complaints without going to court. A Landlord Database, giving renters more visibility into who owns and manages their home. If you’re managing multiple properties or using agents, make sure your documentation, communication and safety certificates are up-to-date before registration opens. 5. Fairer rent rules and pets Rent increases will face tighter restrictions (no more frequent mid-tenancy hikes), and renters will have a formal right to request pets — with sensible safeguards for landlords. When it all happens 27 Oct 2025: “Awaab’s Law” takes effect for social landlords (faster action on serious hazards). 28 Oct 2025: The Renters’ Rights Bill becomes law. 2026 onwards: Key reforms — including the end of Section 21, new standards, and the Ombudsman — start in stages. The Government will announce specific start dates for each measure in 2026. What landlords should do now Review your tenancy agreements. Make sure your terms are flexible enough for a move to periodic tenancies. Audit your properties. Address any damp, mould or repair issues early — new standards will make these top enforcement priorities. Get your paperwork in order. You’ll soon need to register with the landlord database, so organise gas safety, EPC, and other compliance docs now. Talk to us! If you’re planning to sell, refinance, or adjust your portfolio strategy, understanding how the new tenancy rules could affect timelines and yields is essential and that’s where we can help! Our view This Act is a major shake-up, but not necessarily a bad one. Landlords who maintain good-quality homes and communicate clearly with tenants are already doing most of what’s being asked. The key now is to plan ahead, both financially and operationally so that you stay compliant and profitable under the new rules. If you would like to discuss how these changes might affect your buy-to-let plans, refinancing options, or portfolio structure, get in touch with the team at Sarah Grace, we’re here to help you stay ahead of the market.