Will Mortgage Rates Keep Falling? Here’s What You Need to Know
Mortgage rates are already below the base rate—but will they fall further? 📉 Find out what this means for buyers and remortgagers, and whether now’s the right time to act. 👉 Read more on the blog.
It’s widely expected that the Bank of England will continue to cut the UK base rate over the coming months. In fact, the markets are already pricing in several reductions this year, and some economists predict the base rate could be around 3.5% by early 2026—possibly even lower.
So, what does this mean if you’re thinking about buying or remortgaging?
How Base Rate Expectations Affect Fixed Mortgage Rates
Lenders don’t just look at today’s base rate when setting fixed mortgage rates—they focus on where they think rates are headed over the term of the deal. If markets expect borrowing costs to fall, lenders will usually offer lower fixed rates based on those predictions. But if global events suggest rates might rise instead, fixed mortgage rates can increase quickly.
Right now, many lenders are already offering fixed rates below 4%, which is cheaper than the current Bank of England base rate. That’s because they’ve already priced in future cuts.
Will Fixed Rates Drop Further When the Base Rate Falls?
It’s tempting to think that every base rate cut will bring down fixed mortgage rates—but that’s not always the case. Because lenders base their rates on future expectations, a lot of the anticipated cuts are already factored into today’s deals. That means we may not see huge drops every time the Bank of England lowers the rate.
Should You Wait or Lock In Now?
Yes, it’s possible fixed rates could fall further. Tracker and variable rates will almost certainly drop if the base rate does. But further big cuts to fixed rates aren’t guaranteed—especially given the unpredictable global economic landscape.
That’s why, whether you're buying or remortgaging, now is a pretty good time to act. Lender approvals are down, the economic outlook is uncertain, and lenders are offering competitive deals to attract borrowers.
What If Rates Drop After You’ve Secured a Mortgage Offer?
Good news—if rates fall after you’ve received your mortgage offer, you might still be able to take advantage. Most lenders allow you to switch to a lower rate before completion, often through a quick and easy product change with the lender. No new credit checks are usually needed, and the switch can be made in just a few days
So, you can move forward with confidence, knowing you’ve locked in a rate now—but still have the flexibility to change if better deals come along.
Need Advice?
If you’re considering a move or remortgage, speak to Phil, our expert mortgage broker. He searches the entire mortgage market to find you the best possible deal—and he doesn’t charge any broker fees. Give Phil a call on 01525 713111 or click here to send him an email.