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3.5pc mortgages?

Journalist: Tom Haynes, Daily Telegraph

ended 08. May 2025

Are we going to see mortgage rates fall to or below 3.5pc this year? I know most have priced in a Bank Rate of 3.5pc, so averages are not going to be any lower than that, but what are the chances of lenders trying to grab attention with eye-grabbingly low rates?

10 responses from the Newspage community

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Bob Singh
Founder at Chess Mortgages
With a fall in base rate widely expected, the question on everyone’s lips is: how low can rates go by the end of the year? With lenders slashing their rates at every opportunity, a rate below 3% is very possible given the Bank of England’s desire to trim rates further as inflation is tamed. With so much geopolitical instability still present, some challenges remain but the trajectory certainly points to a better future for rates. 3% rates are definitely possible but to get to 2% will take much longer. Every adviser should be advocating long term fixed rates once we hit the bottom of this cycle.
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Mike Staton
Director at Staton Mortgages
I am hoping to see 2.99% mortgages by the end of the year, with the Bank of England widely tipped to take the base rate to 2.5% - 3%, I am confident that we will see fixed rate options lower than that figure, I believe these will come with fees, like Halifax's low rate currently with an attached fee of £1495.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Fixed rate mortgages under 3.5% are certainly achievable by the end of the year, especially for those borrowing under 65% of the value of their property, if rate cuts meet market expectations. It will be interesting to see how the MPC votes today and the comments in the monetary policy report, which should give us further guidance on how this year may pan out.
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Harry Goodliffe
Director at HTG Mortgages
We could see headline rates dip below 3.5%, but it’ll be more marketing than mainstream. Lenders love a headline grabber, and with competition heating up, a few sub 3.5% deals could appear, especially on low LTVs or for squeaky-clean borrowers. But for the average person, rates are likely to hover around the 3.75%–4% mark unless the Bank of England goes harder and faster on cuts. Tempting deals might pop up, but they won’t be the norm just yet.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Rates are dropping at the moment, and if the Bank of England base rate keeps coming down, it does not seem unreasonable to expect some fixed rates to hit 3.5%. We didn't think there would be sub-4% rates for quite a while until Donald Trump announced his tariff increases.
Many borrowers would feel like they are getting good value for money if mortgage rates hit 3.5% and they will also have more spare cash in their pockets to spend and boost the economy.
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Justin Moy
Managing Director at EHF Mortgages
Other factors will typically get in the way of a Base Rate this low, we have increased inflationary pressures on the horizon, along with the uncertainty of worldwide tariffs still resonating. 2 cuts this year would probably be the limit, bringing the base rate to 4% and mortgage rates for most within the 3.5-4% range with reasonable deposits or equity.
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Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
I think it's more than likely we'll see rates drop below 3.5% this year, as that's the direction we're headed in at that moment. Lenders are cutting rates almost every day, it seems, and with further decreases in the base rate expected during the rest of the year, I wouldn't be surprised if the odd lender or two start offering sub-3 % mortgages towards the end of the year. Despite all the chaos his tariffs have caused, we'll likely have Trump to thank if that's the case.
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Elliott Culley
Director at Switch Mortgage Finance
Provided the key indicators the Bank of England see as important for base rate decisions remain positive then it's likely we will see rates drop below. 3.5%. there's still a long way to go and many barriers to hurdle before we can be fully confident that these rates are here to stay. We have been here before and rates have suddenly started to increase again so it's not 100% guaranteed and predictions have been wrong in the past.
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Sean Horton
Managing Director at Respect Mortgages
Mortgage rates below 3.5% this year? I don't think we're there just yet.

Markets expect Bank Rate to fall to 3.5% by December, but average mortgage rates typically sit 1-1.5% above that. We might see a few attention-grabbing headline rates in this territory from lenders hungry for business, but they'll come with hefty fees.

For most borrowers, expect five-year fixed rates to bottom out around 4-4.25% by Christmas if the rate cuts materialise. Two-year fixes will likely remain slightly higher.

The good news? Borrowing costs are heading steadily downward and maybe we will see 3.5% sometime in 2026.
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Hannah Bashford
Director at Model Financial Solutions
Rates of 3.5% could be possible by the end of the year if lenders struggle to fulfil their targets and competition for market share ramps up.
I think these low rates are in the near future but maybe not by the end of this year.