Mortgage rate predictions 2025: Are mortgage rates going down?
As mortgage rates creep up after the Bank of England casts doubts over interest rates cuts, read on for what’s happening now and predictions for the future to help you decide what to do with your mortgage.
Mortgage rate predictions June 2025: Are mortgage rates going down?
In June 2025, some lenders increased mortgage rates asBank of England governor Andrew Bailey warned that the pace of future interest rates cuts was ‘shrouded in uncertainty’ as a result of the unknown impact of Trump’s tariffs on the economic outlook.
Mortgage rates on fixed deals had already been edging up, due to predictions the Bank of England is expected to make interest rates cuts less frequently than had previously been expected.
Mortgage rates do now seem to be settling a little althoughsome lenders are still edging rates up while others are nudging rates down.
But the turbulence of recent months shows how difficult making accurate mortgage rate predictions are. So don’t delay getting a mortgage because you’re trying to second-guess the market. Investigate your options now, then you can lock in a deal and keep it under review in case a better deal comes up before you need to complete.
David Hollingworth at L&C Mortgages said on 4 June 2025, “Mortgage rates have edged up again in recent weeks as the outlook for interest rates continues to look like an uncertain path. Although it’s still expected that rates will be in a downward direction the speed at which the Bank of England may cut rates remains in question.
“Market expectation of harder and sharper cuts has been reversed as fears over trade tariffs has calmed a little. Mortgage rates have therefore edged back up generally but seem to be settling a little after plenty of lender movement.
“The pace of those movements seems to have steadied and although there’s still some increases feeding through there’s also been some that have elected to improve their pricing.
“Recent months have only served to underline that trying to second guess rate movements is an impossible task. Sentiment can move very quickly which has seen mortgage rates having a bumpy ride.
“Borrowers shouldn’t get caught up in wondering what might happen, as we’ve seen that rates can just as easily go against them. Securing a deal and then looking to review it again prior to completion to see if there’s been any improvement looks like the better course of action.“
How can I secure the best mortgage rate in the current market?
Act now: If you’ve got up to 6 months before your current mortgage deal ends you can act now. Speak to fee-free mortgage brokers L&C, they’ll scour the market to find you the best deal and can talk through options like fixed rate mortgages and tracker mortgages (more popular when rates are falling).
Lock in a rate: When rates are volatile, it’s advisable to lock into a deal now in case the best deals disappear.
Keep your rate under review: Use L&C’s online mortgage finder Rate Check service to see if there are any better options you could swap onto before your current deal ends. While other brokers charge for checking your rate is still the best one on offer, this is all part of L&Cs fee-free service.
Avoid overpaying: By starting the remortgage process early, you’ll also avoid accidentally falling onto your lender’s expensive Standard Variable Rate.
The Bank of England cut interest rates from 4.5% to 4.25% in May 2025. This followed interest rates cuts in February 2025, November 2024 and August 2024, when the base rate was first cut from 5.25%.
Will interest rates be cut in 2025 and by how much?
But the future path of UK interest rates has become more uncertain due to Donald Trump’s tariffs war, the Bank of England governor Andrew Bailey has warned.
When asked about the impact of the US president’s chaotic trade policy on the Bank’s policymaking by MPs on the Treasury Select Committee on 3 June, he said, ‘the path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty’, adding that a ‘gradual and careful’ approach to rate-cutting remained his ‘guiding light’.
Mr Bailey also said he continued to expect wage growth in the UK to decline in upcoming months, suggesting the Bank’s Monetary Policy Committee may feel more confident to cut rates.
Markets are now pricing in around two additional quarter point cuts in 2025, from three cuts just a matter of weeks ago.
How do changes in interest rates affect your mortgage?
The Bank of England sets the base rate and it’s important to homeowners because it acts as a benchmark for the cost of borrowing money. As a general rule, if interest rates fall, mortgage rates will fall too.
How changes in interest rates affect your mortgage depend on your circumstances:
1. You’re taking out a new mortgage
If you’re shopping around for a new mortgage or want to remortgage, the mortgage rates available should improve if interest rates fall, although this isn’t guaranteed.
2. You’re on a fixed rate mortgage
If you’re on a fixed rate mortgage, the amount you’ll pay on your monthly mortgage payments will stay the same during your initial term – usually 2 or 5 years. So your mortgage payments won’t change if interest rates go up or down.
3. You have a tracker mortgages
If you’re one of the estimated 600,000 households on a tracker mortgage deal and interest rates are cut, your mortgage payments will fall as the rate you pay on your mortgage rises and falls in line with the Bank of England base rate.
For example, if you have a £200,000 mortgage over 25 years and you’re paying a rate of 5% , your monthly payments will be £1,169.
But if interest rates are cut by 0.25%, the mortgage rate you’ll pay will fall to 4.75%. This means your monthly mortgage payments will fall to £1,140 – so you’ll pay £29 less per month. You’ll find more tracker mortgage worked examples here.
4. You’re on a discounted variable rate
While if you’re on a discounted variable rate, you’ll pay a rate that’s lower than the lender’s Standard Variable Rate. If your lender decides to pass on the cut in interest rates, your mortgage payments will fall. But it won’t necessarily pass on all or any of the cut.
5. You’re on your lender’s Standard variable rate (SVR)
According to UK Finance, there are around 1.1 million households on their lender’s standard variable rate. If this includes you, if your lender decides to reduce its SVR if interest rates fall, the amount you’ll pay will fall. But again, the lender may not pass on all or any of an interest rate cut. And if you are on your lender’s SVR, you should know these rates can be extremely expensive, so check your deal now to see if you can save by remortgaging.
KEY INFORMATION
Which lenders have changed mortgage rates?
In June 2025, the mortgage lenders that have recently made changes to mortgage rates include:
Halifax has increased the cost of residential purchase and remortgage deals by up to 0.14%
Santander has increased some deals by 0.1 percentage points
Nationwide has reduced mortgage rates by up to 0.12% across selected 2, 3 and 5 year fixed rate products
On 5 June 2025, the average mortgage rates according to Rightmove are:
Average 2 year fixed mortgage rate at 60% LTV is 3.97%
Average 5 year fixed mortgage rate at 60% LTV is 4.02%
Average Standard variable rate (SVR) is 7.60%
In terms of current deals available, in June 2025, the best rate on a 2 year fixed rate mortgage is 3.94% from MPowered Mortgages (Max LTV 60%, fee £999, purchases only) and NatWest (Max LTV 60%, fee £1,554, remortgages only). For more information on the best mortgage rates available for different types of mortgages, read our guide to the Best mortgage rates.
In June 2025, the cheapest rates on fixed rate mortgages have been edging up. This came as fears over trade tariffs calmed, meaning the Bank of England is expected to make interest rates cuts less frequently than had previously been expected. Although how quickly rates are expected to fall remains unclear.
Mortgage rates now seem to be settling a little but there is still some movement: some lenders are still nudging up rates while others are trimming them.
So it’s more important than ever to lock in a mortgage deal ASAP instead of holding out in case rates drop. If you secure a mortgage deal you can then keep it under review in case a better deal comes up before you need to complete. Award-winning mortgage brokers L&C offer this Rate-Check service for free
This uncertain picture comes as little surprise to the UK public. In our survey of 2,000 UK adults 37% said they expected mortgage rates to go up over the next 12 months. This expectation outpaced those who believed rates will hold steady (25%) or fall (16%). Meanwhile, 22% said they simply don’t know, reflecting broader economic anxiety and confusion.
Find more on what’s happening with mortgages in our Best mortgage rates guide. And read on for more details on why mortgage rates have fluctuated in recent years.
Here’s a timeline of why mortgage rates have fluctuated in the UK
December 2021: The Bank of England started hiking the base rate from 0.25%. Mortgage rates increased steadily with each increase to interest rates.
September 2022: Mortgage rates had been creeping up steadily with interest rates having increased to 2.25%. But when former prime minister Liz Truss and then chancellor Kwasi Kwarteng announced their disastrous mini-budget that included £45bn of unfunded tax cuts it caused a dramatic increase in mortgage rates.
October 2022: Inflation hits 11.1%.
2023: Mortgage rates fell, before rising again, then falling again as markets predicted the base rate had peaked and would fall in 2024.
Early 2024: Fierce competition in the mortgage market also led to better mortgage rates being available to borrowers. But in the months that followed, lenders hiked fixed rate mortgages in response to the expectation that interest rate cuts would be slower and fewer than had previously been predicted.
June 2024: With better than expected inflation figures, and an expectation the Bank of England would reduce the base rate over the summer, some lenders started to nudge down rates.
August 2024: Following August’s base rate cut from 5.25% to 5%, mortgage lenders started slashing rates on fixed deals.
November 2024: Mortgage rates on fixed deals started increasing in November 2024 despite the Bank of England’s decision to cut interest rates again to 4.75%, due to the expectation that interest rates are likely to stay higher for longer.
December 2024: Mortgage rates edged higher before nudging back down. This was despite the Bank of England’s decision to hold interest rates at 4.75% on 19 December.
January 2025: Mortgage rates edge up as markets predict interest rates cuts will be slower and shallower than previously expected.
March 2025: Average mortgage rates nudged down after several major lenders cut rates following the Bank of England’s decision to cut interest rates in February from 4.75% to 4.5%.
May 2025: A growing number of UK lenders cut mortgage rates as the fallout from US tariffs continued to fuel forecasts of deeper than expected interest rate cuts.
June 2025: With markets predicting interest rates would not be as sharply cut as previously expected, mortgage rates started to creep up.
Global context and economic factors influencing UK mortgage rates
The wider global context and economic factors have an impact on mortgage rates in the UK in a number of ways, for example:
War in Ukraine: Many factors can cause inflation to rise but one major factor in recent years was Russia’s invasion of Ukraine. This is because it increased gas and oil prices, having a knock on effect on the cost of goods. The Bank of England uses interest rate hikes to combat inflation when it gets too high. This in turn increases mortgage rates.
Impact of Trump’s presidency: The US president’s various announcements about tariffs continues to cause economic uncertainty. The short-term impact on UK mortgage rates was for lenders to trim rates due to predictions the Bank of England would cut interest rates more frequently as a result. However, as fears calmed, the number of interest rates cuts predicted has been scaled back. This has led to the best mortgage rates nudging up.
Is 2025 a good time to remortgage?
Yes, 2025 is a good time to remortgage, broadly speaking. But whether or not 2025 is a good time for you to remortgage will depend on your personal circumstances. Here’s what you need to consider:
Check your current mortgage deal’s end date: If your cheap mortgage deal ends in the next six months you should start the remortgage process. This means you can avoid rolling onto your lender’s standard variable rate (these can be as high as nearly 10%) and you may be able to save £1,000s a year by remortgaging.
Compare fixed and variable rates: You’ll need to consider what type of mortgage to choose. For example, in March 2025 the best rates on fixed mortgages are generally lower than the best rates on variable deals. But if you take out a fixed deal you’ll pay the same amount each month over the term. While if you take out a variable deal, the amount you’ll pay can go down – or up – during the term. Stay up to date in our guide to the Best mortgage rates.
If you’re on the SVR: And if you’re currently on your lender’s standard variable rate, you should urgently review your remortgage options because typical SVR rates are significantly higher than the best remortgage deals available.
KEY INFORMATION
Don’t let higher mortgage costs put you off remortgaging
It expects around 4.4 million mortgages to see payments rise by 2027, including £500-per-month hikes for around 420,000 households. However, 27% are expected to see a decrease in payments.
But if your new mortgage is going to cost more than your current one, it’s still important to start the remortgage process. If you don’t, you’ll end up on your lender’s standard variable rate which can be very expensive. So if your mortgage deal ends in the next six months, lock in a rate today then keep it under review.
Remortgage examples in 2025: How much does it cost
Here’s how much remortgaging could cost you based on these scenarios:
Example costs: You took out a 2 year fix when rates were high vs remortgaging now
If you’re coming off a 2 year fixed rate mortgage, the good news is that mortgage rates are now lower than 2 years ago. The average 2 year fixed rate mortgage in June 2023 was 5.26%. By comparison, the average 2 year fixed rate mortgage in June 2025 is 4.71%.
Here’s how much you’ll pay at these rates in the initial term if you borrow £200,000 over 30 years:
Mortgage payment at June 2023’s average rate of 5.26%
Mortgage payment at June 2025’s average rate of 4.71%
Example costs: You took out a 5 year fix when rates were cheap vs remortgaging now
The average 5 year fixed rate mortgage in June 2020 was around 2.4%. By comparison, the average 5 year fixed rate mortgage in June 2025 is 4.66%.
Here’s an illustration of how much you’ll pay at these rates if you borrow £200,000 over 30 years.
Mortgage payment at June 2020’s average rate 2.4%
Mortgage payment at June 2025’s average rate 4.66%
How much more you’ll pay
£780
£1,032
£252
But if you do nothing and roll onto your lender’s standard variable rate (SVR), which average 7.60%, you’ll pay much more.
Here’s how much you’ll pay on a £200,000 mortgage over 30 years at 7.60%, compared to if you remortgage at June 2025’s average 5 year fix rate of 4.66%.
Mortgage payment at June 2025’s average rate 4.66%
Mortgage payments on average SVR of 7.60%
How much more you’ll pay if you move to SVR
£1,032
£1,412
£380
These tables are based on average rates; depending on your circumstances and your deposit size/ amount of equity in your home, you may get access to better rates. So it’s a good idea to get an expert to explain your options. They’ll also factor in any fees you need to pay too so you can find the best deal overall.
More mortgage borrowers are opting for shorter fixed deals, research by Santander found. Its research shows that in final three months of 2024, 65% of customers opted for a 2 year fixed rate mortgage, compared to 27% choosing a 5 year fixed rate mortgage.
This is a shift because in recent years, the lender says its customers have tended to show a 60/40 split in favour of 5 year fixed rate deals.
Factors when deciding between 2 or 5 year fixed rate mortgage
Whether a 2 or 5 year fixed rate mortgage is best for you will depend on your circumstances.
You may want to fix for 2 years in the hope that mortgage rates will improve in the near future and that you’ll be able to remortgage onto a cheaper deal once your 2 year deal ends.
Or you may prefer the security of a 5 year term. Or you might opt for a 3 year fix – or a 10 year fix. Read more about your options in our guide Should I remortgage now?
Remortgaging in 2025: Our view
Paula Higgins, CEO of HomeOwners Alliance, said:
“If we’ve learned one thing in recent years it’s that no one really knows what’s going to happen next with mortgage rates.
“So don’t delay taking action. If your current deal ends in the next few months, speak to a fee-free mortgage broker who will find you the best mortgage deal for you. Then after you lock in a rate they can then keep the rate under review in case a better deal comes up before you need to switch.
“And if you’re coming off a cheap fixed rate, don’t let the higher mortgage rates available today put you off remortgaging: if you do nothing when your current mortgage deal ends and roll onto your lender’s standard variable rate you could end up paying hundreds of pounds more each month on your mortgage.”
Whether or not mortgage rates will go down in the UK in 2025 is unclear. Markets are pricing in further interest rates cuts this year so we may see mortgage rates go down further. But there are many factors at play which makes an accurate prediction difficult to make.
What are the UK mortgage rate predictions for the next 5 years?
The Office for Budget Responsibility‘s most recent forecast in March 2025 was that average interest rates on the stock of mortgages are expected to rise from a low of 2% in 2021 to a peak of 4.7% in 2028 across all properties where they will stay until 2030.
This increase is due to more households coming off cheap fixed rate deals and needing to move onto more expensive rates.
Mortgage rate forecast – how much will I pay?
Here’s an illustration of how your mortgage payments may increase if you’re coming off a cheap fixed deal.
We compare what you’d pay each month at 2.40% – the average 5 year fixed rate mortgage in June 2020 with what you’ll pay each month at 4.66% – the current average 5 year fixed rate mortgage, based on a 30 year term.
Mortgage balance
Monthly mortgage payment at 2.40%
Monthly mortgage payment at 4.66%
£100,000
£390
£516
£150,000
£585
£774
£200,000
£780
£1,032
£300,000
£1,170
£1,549
£400,000
£1,560
£2,065
Mortgage cost calculator
Use our mortgage cost calculator to see instantly how much more or less you’ll pay on your mortgage if interest rates increase or decrease.
Should I wait for mortgage rates to go down before getting a mortgage?
Waiting for mortgage rates to go down before getting a mortgage can be risky for a number of reasons.
Firstly, nothing with mortgages is certain. So even if experts predict mortgage rates to fall further, this may not happen and rates may actually increase.
Secondly, if your current mortgage deal ends soon, if you decide to wait for mortgage rates to go down before getting a new deal and this means you roll onto your lender’s standard variable rate you could end up paying a lot more.
So if your current mortgage deal ends in the next 6 months, and certainly if it ends in the next 4 months, you should start the remortgage process now instead of waiting in case mortgage rates go down.
Choosing between a fixed mortgage, where you’ll pay a fixed rate for a set length or time, or a tracker mortgage where the amount you’ll pay will go up and down in line with the base rate, may seem a tricky decision. You may also consider a discounted mortgage, this will track under the lender’s standard variable rate.
Fixed rate mortgages pros and cons
Pro: You’ll pay the same amount on your mortgage for a set length of time.
Pro: Your rate can’t go up which means you’ll be able to budget more easily.
Pro: In June 2025, the best rates on fixed deals are lower than the best rates on tracker deals.
Con: But if interest rates go down, your mortgage payments won’t go down in line.
Tracker mortgages pros and cons
Pro: If the Bank of England cuts interest rates, the amount you’ll pay on your mortgage will reduce.
Pro: Some trackers let you leave penalty-free during the term which means you could swap to a better deal if mortgage rates improve.
Con: Interest rates may need to be cut substantially in order for you to pay less on a tracker deal than the best fixed rate deals available.
Con: If interest rates increase in the future your payments will go up.
Fixed mortgages vs trackers: How do rates compare?
In June 2025, generally speaking if you’re looking for a variable rate deal, you’ll pay more initially than you would on a fixed deal in the hope that you’ll end up paying less overall if interest rates fall in the future.
Fixed rate mortgage rate example
In June 2025, the best rate on a 5 year fix (assuming you’re not eligible for a green mortgage) is from Barclays at 3.98% (max LTV 60%, scheme fees £958) Remortgages only. Here’s how much it would cost you each month in the initial term if you take out a £200,000 mortgage over 30 years on this deal.
Amount borrowed
Monthly mortgage payment
£200,000
£953
Tracker mortgage worked examples
By comparison, in June 2025, the best 5 year variable rate is Barclays’ Base + 0.60% which has an initial rate of 4.85%. (max LTV 60%, scheme fees £999.) Here’s how much you’ll pay each month in the initial term if you borrow £200,000 over 30 years at this rate.
Amount borrowed
Monthly mortgage payment
£200,000
£1,055
However, as this is a variable rate mortgage, the amount you’ll pay will change if interest rates change. Here’s how much you’ll pay each month on this mortgage if interest rates are cut from the current rate of 4.25%.
Interest rate
Rate you’ll pay (Base + 0.6%)
Monthly mortgage payment
4%
4.6%
£1,025
3.75%
4.35%
£996
3.5%
4.1%
£966
3.25%
3.85%
£938
Although while interest rates are predicted to fall, if they increase, so will your mortgage payments.
When it comes to your mortgage you need to consider what’s best for your individual circumstances. So speak to a fee-free broker so they can explain your options and find the best mortgage deal for you.
Product transfers are expected to be increasingly common in 2025. UK Finance, the trade body which represents the banks, said it expects product transfers will grow by 13% this year. Here’s what you should consider when deciding whether to remortgage with a different lender or your existing one.
Pros and cons of switching lenders vs staying with your current one
Switching lenders
Staying with current lender
Can you access the best mortgage rates?
Yes
Not necessarily. You’ll be limited to the rates your lender offers
Do you need a mortgage valuation?
Yes. You may need to pay for it
No
Is there legal work involved?
Yes. You may need to pay for it
No
Is there an affordability check?
Yes
Not usually if you’re borrowing the same amount for the same term
How quick is the process?
Allow 3 months
Generally around a week
When it comes to switching lenders or staying with your current one, make sure you get advice. Speak to a fee-free mortgage broker and they’ll find the best deal for your circumstances.
What does this mortgage rate prediction mean for first time buyers?
Move fast: If you’re in a position to buy now, act fast. When mortgage rates are volatile, you may want to move quickly to snap up the best rates if you can in case they disappear.
Get advice: Using a mortgage broker can be particularly useful if you’re a first time buyer. They’ll shop around to find the best first time buyer mortgage rates and match you to lenders that will be more likely to accept your application. Plus, they’ll be on hand to answer your questions along the way. Award-winning brokers L&C don’t charge a penny for their mortgage advice.
Work out your budget: If you’re just starting your first time buyer journey, find out how much you can afford to borrow for a mortgage and without over-stretching yourself. Read our guide on How much can I afford to borrow on a mortgage? Find out the cheapest mortgage rates whatever your deposit size (40% to 0%) in our guide to the Best first time buyer mortgage rates.
Build bigger savings: The best mortgage rates are for those with the biggest deposits. To do this, see if you could boost your deposit by saving into a Lifetime ISA. Also, go through your budget and see where you can save. As well as helping to increase your deposit it will also show lenders that you can manage your money responsibly.
Boost your credit score: Your credit rating affects whether your mortgage application will be successful and influences how much your monthly repayments will be. So it’s essential to improve your credit score before you apply for a mortgage. Read our guide 11 Tips to improve your credit score for a mortgage
These factors can help determine whether you’ll get access to cheapest mortgage rates:
Size of deposit: The cheapest mortgage rates are usually available to people with a big deposit – usually around 40% of the property’s value.
Good credit rating: The cheapest mortgage rates are also usually available to people with a good credit rating. If your credit score is less than perfect, read our guide 11 tips to improve your credit score for a mortgage for advice on how to boost it.
Length of deal: The rate you’ll pay will also depend on how long you take your mortgage deal out for.
Fixed vs variable mortgage rates: In June 2025, the cheapest mortgage rates are available as fixed rate mortgages. However, if you take out a fixed rate mortgage, the rate you pay will be the same for the duration of the term. While the cheapest variable rate mortgages may be higher, the rate you pay may reduce (although it may increase). Find out more in our guide What type of mortgage should I get?
Is it worth speaking to a mortgage broker?
Yes, it’s always worth speaking to a mortgage broker. Not only will they be able to explain your options to you but they may also have access to exclusive deals too. But beware, some brokers charge fees. So speak to a fee-free broker like our partners at L&C.
What these mortgage rate predictions mean if you’re on a cheap deal
If you’re currently on a cheap fixed rate mortgage, these mortgage rate predictions may understandably make you feel quite anxious because you’ll likely have to pay a higher rate on your next mortgage. The average rate on a 5 year fix in June 2025 is 4.66% which is much higher than the average rate on a 5 year fix in June 2020, which was around 2.40%.
So if you’re currently on a cheap fix, here’s what you need to do:
If your cheap fix ends soon: Start the remortgage process now. Speak to a fee-free mortgage broker who will find the best mortgage deal for you. You may need to pay more for your new mortgage than your existing one – the ultra-cheap rates we’ve seen in recent years are long-gone. But you may be able to save hundreds of pounds per month by remortgaging onto a new deal compared to if you do nothing and let your mortgage roll onto your lender’s standard variable rate.
If you’ve still got some time on your cheap deal: Take advantage of the low rate you’re currently on and make overpayments if you can. Overpaying will help to drive down the mortgage balance more quickly, which will mean a smaller mortgage when you remortgage onto a new deal. But make sure to check if your mortgage allows overpayments (most do) and also check if there are limits on how much you can overpay by to avoid having to pay an early repayment charge.
If you’re struggling to pay your mortgage you should get help as soon as possible. You’ll find useful advice on the government-backed MoneyHelper website:
1. Talk to your lender
Lenders must treat you fairly and consider any request you make to change the way you pay your mortgage.
So if the new payments are looking unmanageable ask about ways to make them more affordable such as by extending the term of your mortgage, taking a payment holiday or accepting lower payments for a while.
Some solutions will appear on your credit file so ask what the impact will be on your credit score. Although, any impact is likely to be less than if you go into arrears and miss payments without talking to your lender first, says MoneyHelper.
Paying your mortgage is a priority that you need to look at before other bills and payments. You’ll be ‘in arrears’ if you have missed two or more mortgage payments.
If this happens, within 15 working days, your lender must: tell you the total sum of your arrears, list all the payments which you’ve missed or partly paid, tell you the exact amount outstanding under your mortgage and tell you the amount of any charges incurred because of missing any payments (and indicate any charges that may occur if the arrears aren’t paid back).
However, your lender must not seek repossession unless all other reasonable attempts to resolve the situation have failed, and they must give you reasonable notice before taking that action.
If you have missed two or more mortgage payments now is the time to get debt advice. Get free and confidential debt advice from MoneyHelper.
3. Can you get government support?
Depending on your circumstances you may be able to access government benefits and support schemes.
4. What to do if someone is seeking possession of your home
Help is available from the moment you receive written notice from a creditor seeking the possession of your home, says MoneyHelper.
If you’re in England or Wales, the Housing Loss Prevention Advice Service can help you if you’re at risk of being evicted from your property because your mortgage is in arrears.
A housing expert funded by the government will work with you to identify what has triggered the possession claim and recommend solutions. They may be able to give you free legal advice on: mortgage arrears, welfare benefits payments and debt.
If you’re unable to resolve matters and you’re asked to attend a court hearing, a housing adviser can also provide free legal advice and representation at the court.
Find your nearest Housing Loss Prevention Advice Service provider by typing in your postcode and ticking the box ‘Housing Loss Prevention Advice Service’ at find legal advice at GOV.UK
How do interest changes affect other types of borrowing?
When it comes to changes in interest rates, other types of borrowing are affected in a similar way. If interest rates go up, borrowing of any type generally gets more expensive, while when interest rates are cut, borrowing generally gets cheaper. However, this is in general terms as the amount you’ll pay on things like credit cards and loans will depends on a number of factors including your credit history.
Interest rates changes and savings
When interest rates go down, lenders usually reduce the amount of interest they’ll pay on savings accounts.
What’s happening to interest rates in other countries?
In recent years, the UK has had one of the highest interest rates in the G7. The European Central Bank (ECB) started to cut its main interest rate for the eurozone in June 2024 from an all-time high of 4%. After a series of cuts it now stands at 2.25%. While the US’s central bank, the Federal Reserve, cut rates three times in the latter part of 2024. But it held interest rates in March, leaving its key lending rate with a target range of 4.25% to 4.5%, reports the BBC.
Frequently asked questions
What are interest rates and how does it affect me?
The Bank of England sets interest rates and it’s important to homeowners because it acts as a benchmark for the cost of borrowing money. In theory the lower the base rate, the lower mortgage rates. And if the base rate rises, the mortgage rate prediction would be for mortgage interest rates to usually rise too.
What is the current UK interest rate?
The current UK Bank of England base rate is 4.25% in June 2025.
How much is the average standard variable rate?
The average SVR in June 2025 is 7.60%. However, SVRs vary widely by lender. For example Newcastle Building Society’s SVR is currently 6.75% while Aldermore’s SVR is 9.03%.
Why do interest rates change?
The Bank of England increased UK interest rates as it tried to get surging inflation down to the government’s target of 2%.
When will UK interest rates go down further?
Yes, UK interest rates are expected to go down further. However, how far rates are cut and how quickly this will happen depends on a range of factors including what happens with inflation.
How do mortgage rates work?
The higher your mortgage rate, the more expensive your monthly mortgage payments will be and the more expensive your mortgage will be overall. The mortgage rate you’ll get access to is set by your lender and will be based on several factors including economic conditions, the Bank of England base rate, the size of your deposit (your loan to value ratio) your personal and financial circumstances (including your credit history) and type of mortgage you choose.
Are Mortgage Rates Going Down Now?
In June 2025, average mortgage rates have crept up on fixed rate mortgages. However, rates have stabilised and while some lenders are nudging up mortgage rates other lenders are trimming them.
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mortgage.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed
Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN:
656479).
Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent
financial adviser, with no charge to you for the referral.
Bridging Loan and specialist lending service provided by Chartwell Funding Limited, registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ, authorised and regulated by the Financial Conduct Authority (FRN: 458223). Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.
