LEADING EXPERT PROVIDES OUTLINE ON CURRENT UK MORTGAGE MARKET

MORTGAGE applicants could be set to benefit from some of the best deals available in years, according to a leading property expert.

Sam Fox, the founder of the UK Mortgage Centre, says the housing market remains strong despite recent stamp duty increases.

“Following the increase in stamp duty in April, we’ve seen an increase in the number of mortgages and purchases which is a really positive sign,” he said.

“More and more sub four per cent rates are currently hitting the market from various lenders, including the big high street banks.

“It means that fixing on a two-to-five-year deal could secure you a better rate than we’ve seen over the past couple of years.

“The Bank of England is set to meet next week to discuss a potential base rate change. If the rate drops again, we could see lenders reduce their rates further.”

According to latest industry data from, the average asking price of a home reached a high of £377,000 in April, which further suggests increased demand in the market despite the stamp duty changes.

Outlining whether he thinks borrowers may be set to benefit from future base rate cuts, Sam continued: “The borrowers most likely to benefit from a base rate cut will be those with tracker or variable rate mortgages. Most outstanding residential mortgages are on fixed rates, so for the majority of these borrowers, changes to the base rate won’t affect their payments until their fixed term ends.”

Explaining in more detail how different mortgages are being impacted by the current market conditions, Sam added: “Variable rate mortgages include both discounted rates and standard variable rates (SVRs), with monthly payments that can rise or fall. Tracker mortgages, which follow the Bank of England base rate plus a set margin (e.g., base rate +0.5%), often have no early repayment charges, making it easier for borrowers to switch deals.”

“SVRs are the default rates borrowers move to when their fixed or initial deal expires, and they don’t remortgage. Lenders can change SVRs at any time, and while they often move in line with the base rate, they don’t always match it exactly. They can rise or fall by a greater or smaller margin and that’s what we are seeing at the moment.”

Here, Sam shares a wider overview on the current landscape within the UK mortgage market:

What is the current base rate? 4.5%

The base rate was cut on 6th February 2025 to 4.5%, which is the lowest level since 2023.
Mortgage interest rates are largely determined by the base rate, which is considered to be “the single most important interest rate in the UK,” according to The Bank of England (BoE).

How is this rate influenced?
This rate is influenced by different economic factors, including the inflation rate, central bank policy, and market demand and is set by the BoE every six weeks, with another committee meeting being held on Thursday 8th May to determine any potential changes to the rate.

This rate refers to the amount of interest that the BoE pays to high street banks that hold money with them. It impacts on the lending and savings rates of these high street banks, which they pass onto borrowers or saving account holders.
Mortgage product lenders, therefore, regularly adjust the interest rates on their deals based on this rate.

What are the average rates now for two-year and five-year fixed rates?
According to figures reported by Rightmove, the current average rates for 2-year and 5-year fixed-rate mortgages are set out below:

Average rates for 2-year and 5-year fixed-rate mortgages

Term
Average Rate
Yearly Change
2-year fixed
4.71%
-0.67%
5-year fixed
4.66%
-0.31%

What repayment options do I have?
Most types of mortgages in the UK are categorised as either repayment mortgages or interest-only mortgages.

Your standard homeowner’s mortgage is a repayment mortgage.

This means that your mortgage payments include repayments on the amount you’ve borrowed as well as interest on the loan.

If you have an interest-only mortgage, then you’re only required to pay the interest on the loan each month.

Instead of repaying the capital you’ve borrowed in installments, you pay it back at the end of the mortgage period.

Interest-only mortgages are a popular choice when buying-to-let, and their main advantage is that the monthly payments are low, because you’re only required to pay back the interest on the loan, helping to increase cash flow and free up money for other expenses or investments.

You can only be offered an interest-only mortgage if you demonstrate to a lender that you’ll have the means to pay off the debt at the end of the agreed mortgage period.
This could be achieved using an investment, inheritance, trust funds, or by selling another property.