While mortgage rates have continued to decrease throughout 2025, there won’t be any “dramatic drops” before the end of the year, Pure Property Finance mortgage adviser, John Morris, has said.
His comments come as two-year mortgage rates fell to a three-year low, dipping below 5 per cent for the first time since the Liz Truss mini-Budget.
This fall was attributed by Morris to swap rates easing, allowing lenders to pass reductions on to borrowers, and base rate cuts which have sparked fresh lender competition.
However, despite this progress, Morris cautioned that he didn’t think there would be any significant drops as we get to the end of the year.
He emphasised that “it definitely won’t reach the 2 per cent mark that we had pre-Covid”.
While Morris acknowledged that there is some optimism that rates might soften throughout the year, he reiterated that it won’t be a “dramatic” drop.
With inflation starting to ease ever so slightly, lenders are pricing conservatively and, as a result, are still reluctant to make any huge changes.
“Mortgages may decrease more in the coming months, but we won’t reach pre-pandemic levels for a long time,” he added.
Additionally, Morris provided advice for borrowers, pointing out that the necessity to lock in a fixed-rate deal is very much dependent on the borrowers’ personal circumstances.
“Some borrowers have opted to sit on variable/tracker rates as mortgage costs trend downwards, to switch to a fixed rate once the market plateaus,” he said.
“Others who need more payment security or higher lending would be more suited to a fixed rate as this offers a guaranteed monthly payment for a set terms, regardless of what happens with the Bank of England base rate.
“Each borrower’s scenario is different. It’s still important to seek advice on what deal suits your scenario best.”
tom.dunstan@ft.com
What’s your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com