Yes, it’s expected that interest rates will be cut in 2025. During a video interview with the Financial Times on 4 December, Bank of England Governor Andrew Bailey signalled the UK could see four quarter point interest rate cuts next year. This would see interest rates fall from 4.75% to 3.75%.
However, interest rates predictions are difficult as any further cuts depend on factors such as what happens with inflation. So predictions have to be revised. For example, in January 2024, Capital Economics forecast that interest rates would be reduced to 3.00% in 2025.
Which lenders have reduced mortgage rates?
Lenders that have reduced mortgage rates in recent weeks include:
NatWest has reduced rates on some mortgage deals by up to 0.16%, while it has reduced rates on Buy to Let mortgages by up to 0.39%.
Santander has made reductions to selected fixed rates across its residential purchase and remortgage range by up to 0.23%. In addition, the lender has introduced £250 cashback on all residential mortgages at 85% LTV and above. For example, its 95% LTV five-year fixed rate at 5.29% with a £0 fee, has decreased by 0.12% and has £250 cashback added.
Barclays has cut its residential mortgage rates across multiple ranges, including cutting residential purchase and remortgage five-year fixed rates by up to 0.14%
What are the latest UK mortgage rates?
On 19th December 2024, the average mortgage rates according to Rightmove are:
Average 2 year fixed mortgage rate at 60% LTV is 4.33%
Average 5 year fixed mortgage rate at 60% LTV is 4.22%
Average Standard variable rate (SVR) is 7.99%
Article from Home Owners Alliance
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