Every Friday, we take an overview of the mortgage market before rounding up the best rates (today we’ll focus on house purchase customers) with independent experts from Moneyfacts.
You won’t be surprised to see the Bank of England’s decision to cut rates from 4.5% to 4.25% yesterday is leading our Mortgage Guide this week.
Looking first at those looking for a fixed rate, the decision might not change too much in the short term, as many lenders had already priced in a cut ahead of the Bank’s announcement.
Earlier this week, MPowered Mortgages cut two, three and five-year fixed rates by up to 0.17%, and Nationwide offered up sub-4% first-time buyer rates for the first time since September 2024.
TSB cut by up to 0.20%, NatWest and RBS by up to 0.17%, Gen H by up to 0.20%, and Santander by up to 0.20%.
In other product news, Skipton Building Society took the novel decision to offer a mortgage with no repayments for the first three months, aimed at luring in cash-strapped first-time buyers.
Cheaper repayments
Fixes aside, the average homeowner on a tracker mortgage can expect their monthly repayments to fall by £28.97 after the base rate cut, according to trade association UK Finance.
This could add up to a saving of nearly £350 over the course of a year.
People on a standard variable rate (SVR) mortgage – which kicks in when their deal ends – could see their monthly payments fall by £13.87, assuming that their lender passes on the base rate cut in full, which would add up to a saving of nearly £170 a year.
More mortgage cuts could come?
Markets had expected three more rate cuts after this one in 2025 – but while that is still a possibility, analysts are no longer as certain.
Either way, the current thinking is the base rate will be at 3.5% or 3.75% as we head into 2026 – though forecasts are a mug’s game.
Richard Donnell, executive director of Zoopla, said any better deals would “filter slowly” through, given the cost of fixed-rate mortgages already reflects future cuts to the base rate.
“There’s still plenty of tweaking of rates in the market but fixed rates are looking to predict what will happen rather than react to base rate movement,” agreed David Hollingworth, associate director at L&C Mortgages.
Products to consider
Moneyfacts has rounded up the lowest rates for house purchases for us…
Moneyfacts also picks out “best buys” that look beyond rates to take into account fees and incentives…
Let’s not forget house prices
The average UK house price increased by nearly £900 month on month in April, despite some homebuyers facing a stamp duty cliff edge, according to Halifax.
The bank recorded a 0.3% month-on-month price rise to 3.2% in April, following a 0.5% monthly fall in March.
The average property price in April was £297,781, up from £296,899 in March.
“The rebound in prices suggests the market may be finding its footing after a turbulent few months,” says Jonathan Handford, managing director at estate agent group Fine & Country.
But the figures contrast with Nationwide Building Society’s latest house price index, released last week.
Nationwide reported that prices dipped by 0.6% month on month in April.
