As we hurtle through 2025, the mortgage market is experiencing a notable shift – a combination of rate drops, increased lender competition, and changing borrower behaviour.
Here’s what you need to know to stay ahead.
1. Two-Year Rates Edge Lower Than Five-Year Deals
Thanks to recent Bank of England base rate cuts, two-year fixed mortgage rates are now below five-year options – a shift not seen since before the pandemic. This is driven by increased competition among lenders and updated affordability rules, giving buyers more flexibility and potential savings.
2. Tracker Mortgages Still in the Game
If you’re on a tracker or SVR (Standard Variable Rate), there’s more reason to smile. With the base rate set at 4%, many homeowners are seeing monthly repayments dip by around £29. While this doesn’t affect most fixed-rate borrowers, it provides welcome relief for those on flexible products.
3. Remortgage Surge & The SVR Trap
Many fixed-rate deals are now ending, and remortgaging is becoming urgent for thousands. Staying on an SVR could mean an average monthly increase of £107, making it vital to act early and lock in more competitive deals.
4. Borrowing Power Is Expanding
Some lenders, including Santander, are taking action – letting borrowers borrow up to 5.5 times their income depending on income level and loan-to-value. This unlocks options for higher lending capacity for those with solid affordability.
Why It Matters to You
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First-time buyers: Now could be the time – two-year rates look sharper, and borrowing thresholds are more flexible.
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Remortgagers: Avoid overpaying after your fixed rate ends. Early action now can save you hundreds monthly.
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Buyers & Movers: Whether upsizing or investing, more generous LTI allowances could help you achieve your goals sooner.
What You Can Do Now
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Compare fixed-rate deals – shorter terms may now be more competitive and save on interest.
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Think beyond rate alone – consider overall mortgage costs, term length, and flexibility.
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Don’t wait – our advisors can help you go through lender options, fees, and timing based on current market shifts.
Ready to navigate the new mortgage landscape?
At Your Mortgage Shop, we’re here to turn this evolving market into your opportunity. Let’s tailor a solution that works for your goals and budget
