Yes, for many UK homeowners, now is a good time to fix your mortgage. With the Bank of England’s base rate recently reduced and fixed mortgage rates trending downward, locking in a deal could offer financial stability. However, individual circumstances vary, so it’s essential to consider your specific situation before making a decision.
In This Article:
- Bank of England’s Base Rate in 2025
- Should I Fix Now or Wait?
- How Long Should I Fix For?
- Advice From Stuart Brown Mortgage Services
Bank of England’s Base Rate in 2025
As of 8 May 2025, the Bank of England (BoE) reduced its base rate from 4.5% to 4.25%, marking the second cut this year and the lowest rate since May 2023 . This decision was influenced by a decline in inflation, which stood at 2.6% in March 2025, down from a peak of 11.1% in October 2022 .
Historically, the base rate has fluctuated significantly:
- December 2021: 0.25%
- August 2023: 5.25%
- May 2025: 4.25%
These changes reflect the BoE’s efforts to balance economic growth and inflation control. The recent rate cuts aim to stimulate borrowing and spending by making loans, including mortgages, more affordable.
Should I Fix Now or Wait?
Fixing your mortgage now could be advantageous, especially if you’re nearing the end of your current deal or on a variable rate. Here’s why:
Reasons to Fix Now
- Rising Standard Variable Rates (SVRs): Many homeowners who secured five-year fixed-rate mortgages in 2020 are facing significant payment increases as their deals expire. According to The Scottish Sun monthly payments could rise by an average of £510. This brings the total to £1,227 per month based on an average mortgage debt of £178,523 .
- Falling Fixed Rates: The lowest two-year fixed-rate mortgage available is now 3.72%, compared with 4.15% at the start of 2025 . Similarly, five-year fixed deals are available at rates as low as 3.83%.
- Predictable Payments: Locking in a fixed rate provides certainty over your monthly payments, aiding in budgeting and financial planning.
Reasons to Wait
- Potential for Further Rate Cuts: Many analysts expect the BoE to announce further cuts later in the year . If this occurs, fixed mortgage rates could decrease further, potentially offering better deals if you wait.
- Early Repayment Charges: If you’re still within your current fixed-rate period, switching now could incur early repayment charges. It’s essential to weigh these costs against potential savings.
Mortgage Scenarios
- Good Time to Fix: If your current deal is ending within the next six months, many lenders allow you to lock in a new rate now without penalties.
- Consider Waiting: If you’re early in your fixed-rate term or anticipate moving soon, it might be better to wait, especially if early repayment charges apply.
How Long Should I Fix For?
Choosing the right fixed term depends on your financial goals and circumstances.
Two-Year Fixed
- Pros: Lower interest rates; flexibility to re-mortgage sooner.
- Cons: Less long-term security; potential for higher rates upon re-mortgaging.
Five-Year Fixed
- Pros: Balance between rate and security; protection against rate increases.
- Cons: Less flexibility; early repayment charges if you move or remortgage early.
Ten-Year Fixed
- Pros: Long-term payment stability; ideal if you plan to stay in your home for a decade or more.
- Cons: Higher rates, significant penalties for early exit.
Mortgage advisor Verona Frankish notes, “The mortgage rates offered by lenders are, of course, influenced by the wider economic landscape and subject to change from one month to the next“.
Advice From Stuart Brown Mortgage Services
Fixing your mortgage now can offer financial stability in the midst of economic uncertainty. With the BoE’s base rate at 4.25% and fixed mortgage rates declining, it’s an opportune moment for many homeowners.
However, personal circumstances, such as your current mortgage terms and future plans, should guide your decision.
At Stuart Brown Mortgage Services, we’re just a call away if you need advice. We can assess your individual situation and help you make a sensible, informed decision.
Get in touch today to speak with an expert and secure the right mortgage deal for your needs.
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