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Are you worried about mortgage rates?

Journalist: Carmen Reichman, FTAdviser

ended 22. May 2025

Dear advisers

Are you concerned mortgage rates could start to creep up again if US Treasury yields remain elevated and gilts follow in their footsteps?

US long-term borrowing costs are at their highest level since 2023 and while they've been quite volatile lately, and banks are probably not going to respond to every twist and turn, what if they start to stick?

Is this on your minds at all at the moment? Could you elaborate why you either think there's a real risk rates could go up again or why you don't see any cause of concern at the moment. 

It's for FT Adviser. Thank you!

Carmen

carmen.reichman@ft.com

5 responses from the Newspage community

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Editor
Rob PetersVerified
Principal at Simple Fast Mortgage
“Rising US Treasury yields are definitely on the radar. The UK mortgage market doesn’t operate in a vacuum, and if gilts follow the US upward and those movements start to stick, we could see upward pressure on mortgage pricing again, especially fixed rates. Something no one wants.

That said, one or two turbulent sessions in the bond markets don’t always translate directly to rate hikes. Lenders tend to wait for consistent patterns before reacting. It’s something to watch closely, not panic over just yet. The fundamentals in the UK still point to a slow, downward trajectory for rates overall, but volatility could cause short-term bumps. As ever, predictions are only as good as what we know right now, and this could all change tomorrow. ”
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Katy EatentonVerified
Mortgage & Protection Specialist at Eatenton Finance
I think we have seen the last of the mini rate war we have witnessed recently. If rates do creep up, it will be a blip i feel, with the general consensus being that over time they will continue to reduce.
It should be a wake up call for brorowers to stop procrastinating and make moves while they can
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Elliott CulleyVerified
Director at Switch Mortgage Finance
Mortgage rates have started to plateau and for the time being mortgage rates appear to be stable. Even in times of stability rates can increase as lenders make financial decisions on margin and levels of business. Over the course of the year rates are still looking likely to fall further, but this is just a prediction and world events can change the outlook quickly and without warning.
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Jonathan Burridge0
Founding Adviser at We Are Money
The hints are that we are close to the bottom of cycle, so rates are likely to bounce around where they are for a while. Historically, two year rates were priced lower than five year rates, then we had all the turmoil in 2022 and for the first time in my more-than-thirty-year career, five year fixed were lower - until recently. Currently two and five year fixes are broadly on par. So, if we see "normal" again, two year fixes will be slightly cheaper as the scales reset. With most of the lender economists predicting base of 3.5%, we are close. So, dont worry about peaks and troughs. If base does get down to the expected levels and stability remains, BoE base will see-saw 3.5-4% and fixes will do likewise. But always remember, any prediction is a guess and will prove to be lucky or wrong.
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Mark Eaton0
COO at April Mortgages
This is exactly why longer-term fixed rates exist. They give borrowers a way to cut through the noise and escape the constant pressure of interest rate speculation.

Markets will do what markets do. Yields climb, swap rates shift, lenders react and meanwhile, ordinary borrowers are left trying to plan their lives with no real certainty. We believe it is time to stop treating short term fixes as the default and start recognising the true value of long-term stability.

If we want to reduce borrower anxiety and help people make more confident financial decisions, then products that remove the risk of rate volatility, like 10 year fixes, should be front and centre. The volatility is here to stay, but the stress does not have to be.