A straightforward look at what is happening in the mortgage world this month.
Where We Stand: Base Rate and Market Mood
The Bank of England kept the Bank Rate at 4.00% in early November. With inflation continuing to cool (recent figures are around 3.6–3.8%) and the wider economy slowing slightly, many lenders are behaving as though a rate cut is likely in December.
Financial markets are currently pricing in a very high chance of a cut.
Fixed Deals: Gradual Improvements
Average fixed rates have continued to edge down. The average 2-year fixed rate recently dipped below 5%, which is a meaningful shift compared with earlier in the year.
More lenders are returning with competitive products, and some have already priced in possible future base-rate cuts.
If your current deal ends within the next 6 to 12 months, it is worth looking at options now. You can secure a deal early, and still review things if rates continue to move in your favour.
Looking Ahead: What Could December Bring?
The next Bank of England decision is on 18 December 2025, and many analysts expect a cut to around 3.75%.
If that happens, borrowers on tracker or variable mortgages may see a reduction in monthly payments.
Even without an official cut, recent movements in swap rates (which lenders use when pricing fixed deals) suggest fixed-rate mortgages could continue to fall slowly over the winter.
What This Means for Borrowers and Home Buyers
- Fixed rate ending soon - Start comparing options now. Acting early gives you flexibility without locking you in too soon.
- First-time buyer or mover - Improving rates may help affordability. Focus on what is comfortable for your budget rather than trying to time the market.
- Tracker or variable rate borrower - A December cut may reduce your payments. It is still worth planning for both outcomes: a cut or the rate staying the same.
- Buy-to-let borrower - Lenders are becoming more competitive again. This may be a good time to review your portfolio and consider remortgaging.
What We Are Watching This Month
- The 18 December Bank of England rate decision.
- Whether lenders start to compete more aggressively on pricing.
- Swap rates and gilt yields, which continue to drift down.
- Housing demand, which may strengthen if confidence improves.
Final Thoughts
December feels like a month of cautious optimism. With inflation easing and the possibility of a base-rate cut, there may be opportunities for borrowers to save money over the coming months.
If you are thinking about moving, buying or remortgaging, now is a good time to review your position. We can help you look at different scenarios and decide the best approach for you.
