Stability or stagnation? BoE’s 4% rate hold sets the tone for the mortgage market in 2025

The Bank of England (BoE) has announced that the base rate will remain at 4% for the second consecutive time, meaning it will stay unchanged from August through December 2025. But what does this decision mean for homeowners, depending on the type of mortgage they have?

John Fraser-Tucker, Head of Mortgages at online mortgage broker Mojo Mortgages, explains:

“The Bank of England’s (BoE) decision to hold the base rate at 4% on November 6th 2025 means caution is warranted: the BoE is signalling it’s not yet comfortable with cutting further.  For existing mortgage holders due to review their existing deals there is little change being offered in the rate market. We can expect relative stability barring any macro events that shake the funding markets, noting of course a well anticipated Autumn Budget on November 26th.  For First Time Buyers, although there is no immediate relief on expected rate reductions, there is some optimism with hints of reductions to come.  The window for active purchases is closing however with the seasonal December slow-down imminent, this may place more pressure on an already stagnant sale and purchase market with many perhaps opting to see where we are in the new year.” 

Fraser-Tucker has also shared how the BoE’s decision to lower the base rate is likely to impact mortgage borrowers: 

Fixed-rate mortgages: 

Whilst the base rate remains unchanged, the average mortgage rate has been on a downward trend when compared to the start of the year. For example, the average 2-year fixed rate has fallen from 4.5% to 4.3% and the average 5-year fixed rate has dropped from 4.4% to 4.2%. 

This shows that rate pricing is reflective of broader economic conditions and that those who are set to remortgage or buy their first home soon are likely to secure a more favourable mortgage rate than they would have at the start of the year.  

Tracker mortgages:

Borrowers on tracker mortgages, which are directly linked to the base rate, will see no immediate change in their interest rate or monthly payment. 

Standard Variable Rate (SVR) mortgages:

While lenders are not obligated to adjust SVRs in line with the base rate, many may choose to keep them steady, offering consistency for borrowers. The current average SVR rate is 7.58%

Average 2 and 5 year fixed mortgage rates per month in 2025: 

Mojo Mortgages has uncovered the average fixed mortgage rate for 2-year and 5-year fixed-rate mortgage deals for every month of 2025 so far, despite the base rate remaining at 4% since August this year.

The data is based on Mojo Mortgages’ deals available from five of the biggest UK lenders: Santander, Nationwide, NatWest, Halifax, and HSBC.