06/02/2025
Mortgage Rate Cut down to 4.5% Set to Boost Market Confidence
The recent cut to the base rate down to 4.5% is expected to lift market sentiment among home buyers, according to Richard Donnell, Executive Director at Zoopla. However, he notes that the impact will be more psychological than financial, as mortgage rates have already factored in expected base rate changes.
“The trajectory of base rates is already reflected in fixed-rate mortgage deals, which dominate the market. However, it’s encouraging that 2025 has begun with lower mortgage rates compared to the past two years,” Donnell stated.
Currently, the average five-year fixed mortgage at 75% LTV stands at 4.4%, while a two-year fix is slightly higher at 4.6%, according to Bank of England data.
With borrowing costs stabilizing, both buyers and sellers are returning to the housing market after previously delaying decisions due to rising interest rates. This renewed confidence is expected to bring more movement and activity in the sector.
