Mortgage borrowers can still find cause for optimism as numerous lenders continue to reduce fixed rates, even after the Bank of England maintained its base rate at 4 per cent on Thursday, experts have said.
Despite the decision to hold rates, positive signals emerged from the Bank, which indicated that inflation has now reached its peak and is anticipated to fall in the coming months.
Bank governor Andrew Bailey stated that a cut to the base rate would only occur once “we need to be sure that inflation is on track to return to our 2% target.”
Alice Haine, a personal finance analyst at Bestinvest by Evelyn Partners, said: “For mortgaged homeowners, the headline interest rate may not have shifted, but the good news is that mortgage affordability has improved for some.
“Five rate cuts since last summer, a more relaxed lending environment, slower house price growth and strong wage gains have helped to ease affordability pressures. However, today’s decision to hold rates, coupled with uncertainty over potential property tax hikes in the upcoming Budget may feel unsettling for homeowners and prospective buyers alike.”
David Hollingworth, associate director at L&C Mortgages, said: “The fact that the outlook for rates has improved has already resulted in a reduction to the cost of funds for lenders and there’s been a raft of cuts to fixed rates already.
“Most major lenders have trimmed back their rates in the last couple of weeks, which has helped bring rates back down.
“That does mean that the expected cuts to base rate are therefore already being priced into fixed mortgage deals, whereas tracker rates will only react once the base rate is cut.”
Matt Smith, a mortgages expert at Rightmove, said: “We’ve started to see some lenders become more competitive in certain segments of the mortgage market in recent days, and offer some headline-grabbing cheaper rates, as they look to secure some final business before the end of the year.”
According to figures from UK Finance, 1.6 million fixed mortgages were due to expire in 2025, of which many will have already done so, and 1.8 million deals are set to end in 2026.
Several mortgage lenders have launched new rates this week, including Nationwide Building Society, Lloyds and Halifax.
HSBC UK also announced this week that it has introduced a new maximum mortgage loan-to-income (LTI) ratio of up to 6.5 times annual income for its Premier customers.
To qualify for HSBC Premier, customers must have an annual income of at least £100,000 paid into an HSBC Premier account, or hold £100,000 or more in savings or investments with the bank.
Lorna Hopes, mortgage specialist at chartered financial advisers Smith & Pinching, said: “Competition between lenders had been heating up before today, and the small print behind the Bank’s decision could now light the touchpaper on a fixed rate price war.”
Frances Haque, chief economist at Santander UK, said lower swap rates have enabled lenders to cut mortgage rates, adding: “We hope to see the market stay on this positive and upward trend – with modest house price growth to continue as we near the end of the year.
“Whether or not we’ll see a base rate reduction before the end of 2025 will depend heavily on what comes out of the Budget, and whether we see recent positive trends in inflation and wage growth continue in upcoming data releases.”
Tony Hall, head of business development at Saffron for Intermediaries, said: “Borrowers may start to see greater choice in the months ahead if price pressures continue to ease.”
Jason Tebb, president of OnTheMarket, said: “The vote was close with the rate setters voting by a majority of five to four to hold rates.
“While this will be disappointing news for those borrowers who had hoped for a rate cut this time around, it may mean the next reduction is not too far off.”
According to Moneyfactscompare.co.uk, the average two-year fixed mortgage rate on the market was 4.94% at the start of November 2025, down from 5.39% a year earlier.
The average five-year fixed-rate mortgage was 5.01% at the start of November 2025, down from 5.09% a year earlier.
The typical standard variable rate (SVR), which borrowers may find themselves on when their initial deal ends, was 7.27% at the start of November 2025, down from 7.95% a year earlier.
Frances McDonald, director of research at Savills, said: “Although the pace of interest rate cuts has been slower than expected, they will still play a key role in stimulating demand and supporting house price growth over the next five years.
“Combined with more relaxed mortgage rules – which allow some buyers to borrow a larger multiple of their income – and a materially stronger UK economy beyond 2026, we expect renewed upward pressure on house prices.
“Our latest forecast predicts that UK average house prices are set to rise by 22.2% by 2030, with annual growth peaking at 5.0% in 2028 and 5.5% in 2029.”
Amy Reynolds, head of sales at London-based estate agent Antony Roberts, said: “Although many have spoken about a market where not much is going on, which meant we were expecting a very quiet November in the run-up to the Budget, that hasn’t been the case. We’ve agreed a high number of sales – mainly freehold homes – with prices reaching up to £2.5 million.”
Reena Sewraz, Which? retail and money editor, said that for savers, now may be a good time to shop around, adding: “Many digital banks and building societies are currently offering much more competitive rates than those on the high street.
“If you’re prepared to put your money away for longer, now may also be a good time to consider a fixed rate savings bond to lock in a good rate, as it’s possible the Bank (of England) may cut rates at its next meeting.”
Savers have seen rates drift downwards over the past year.
The average easy access savings account on the market at the start of November paid 2.52%, Moneyfacts said, down from 3.03% a year earlier.
The average easy access cash Isa paid 2.71% at the start of November, down from 3.24% a year earlier. Moneyfacts’ savings rate analysis was based on someone having £10,000 to put away.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Frustrated savers who are fed up of seeing their cash eroded by inflation might be more inclined to open a fixed-rate bond or Isa, with many paying a guaranteed return of 4% or more.
“Taking time to shop around for the best rates and switching is essential to get any cash working harder.”