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"Flat inflation offers hope but not a home run for mortgage holders"

ended 22. October 2025

FINANCIAL and mortgage experts have said that while inflation staying unchanged at 3.8% in the 12 months to September may take a small amount of pressure off mortgage rates in the short term, the Budget will likely see lenders err on the side of caution.

One said “this may be the signal to reserve a deal now, before any bad news pushes rates up next month”. Another added "the country is really waiting to see if Reeves will topple Truss as the Queen of Bad Budgets."

Eamonn Prendergast, Chartered Financial Adviser at Bromley-based Palantir Financial Planning Ltd, said “flat inflation offers hope but not a home run for mortgage holders”.

He continued: "Inflation staying flat at 3.8% gives a glimmer of relief for borrowers and keeps the door open, at least slightly, for lower mortgage rates ahead. However, with core inflation still stubborn at 3.5% and services running near 4.7%, lenders are unlikely to rush into major cuts just yet.

“We might see marginal downward movements in SWAP rates and cautious tweaks to fixed-rate deals, but real relief will depend on the next data prints and the tone of the Budget. For now, stability is the win — not celebration.”

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, urged borrowers to reserve a deal now befopre potentially worse news on Budget day: "With expectations of inflation hitting 4% in September, this is a welcome hold at 3.8% and may at least take a bit of pressure off mortgage rates in the short term. 

“The uncertainty of the November Budget casts a dark cloud over the economy, so there are no immediate expectations of significant rate cuts, but for the 750k borrowers with expiring mortgage deals in the next six months, this may be the signal to reserve a deal now, before any bad news pushes rates up next month.

Rohit Kohli, Director at Romsey-based The Mortgage Stop said that while inflation stayed unchanged, mortgage rates will likely stay sticky and the market will continue to stall due to the Budget.

He added: “The Budget has been delayed to the latest slot and effectively parked, which only fuels rumour and freezes decisions. The result is clear: buyers delay, transactions slow, affordability stays tight and confidence ebbs.”

Ben Perks, Managing Director at Stourbridge-based Orchard Financial Advisers, said: “Inflation is flat, much like the atmosphere in the property market. Whilst this may be welcome news for interest rates, many borrowers are waiting for the Budget next month before making a move. Figures can be reassuring but the country is really waiting to see if Reeves will topple Truss as the Queen of Bad Budgets.”

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, added: “Inflation might be flat on paper, but it doesn’t feel that way for homeowners. CPIH shows the real bite with housing costs remain stubbornly high, and many borrowers are still facing sharp jumps in their mortgage payments. For families, the squeeze hasn’t eased, it’s just shifted. Lenders will watch swap rates nervously and may tweak pricing around the edges, but most will wait for Budget clarity before making any bold moves.”

David Stirling, Independent Financial Adviser at Belfast-based Mint Wealth Ltd, said September’s inflation figure of 3.8% offers little comfort for borrowers.

He continued: "Core prices remain stubbornly high, which means mortgage lenders are most likely to hold rates steady until the Budget provides clarity. Any cuts will probably be modest and selective, leaving most households facing elevated borrowing costs for the foreseeable future.

“Rachel Reeves' delayed Autumn Budget continues to be the elephant in the room, as we all wait for the widely anticipated turmoil and tax hikes to be unveiled.”

7 responses from the Newspage community

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Editor
Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
Flat inflation offers hope but not a home run for mortgage holders. Inflation staying flat at 3.8% gives a glimmer of relief for borrowers and keeps the door open, at least slightly, for lower mortgage rates ahead. However, with core inflation still stubborn at 3.5% and services running near 4.7%, lenders are unlikely to rush into major cuts just yet. We might see marginal downward movements in SWAP rates and cautious tweaks to fixed-rate deals, but real relief will depend on the next data prints and the tone of the Budget. For now, stability is the win — not celebration.
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Justin Moy
Managing Director at EHF Mortgages
With expectations of inflation hitting 4% in September, this is a welcome hold at 3.8% and may at least take a bit of pressure off mortgage rates in the short term. The uncertainty of the November Budget casts a dark cloud over the economy, so there are no immediate expectations of significant rate cuts, but for the 750k borrowers with expiring mortgage deals in the next six months, this may be the signal to reserve a deal now, before any bad news pushes rates up next month.
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Rohit Kohli
Director at The Mortgage Stop
Inflation stuck at 3.8% will see the Bank of England leave things on hold, so mortgage rates will stay sticky and the market continue to stall. This government has no grip and looks out of ideas. The 1.5 million homes pledge is in tatters. Planning reform is a mess, paralysing local authorities while developers lodge speculative, wrong-for-the-location applications driven by profit not homes. The Budget has been delayed to the latest slot and effectively parked, which only fuels rumour and freezes decisions. The result is clear: buyers delay, transactions slow, affordability stays tight, confidence ebbs. We need certainty, a usable planning rulebook and real delivery, not more tax talk and headlines.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Inflation might be flat on paper, but it doesn’t feel that way for homeowners. CPIH shows the real bite with housing costs remain stubbornly high, and many borrowers are still facing sharp jumps in their mortgage payments. For families, the squeeze hasn’t eased, it’s just shifted. Lenders will watch swap rates nervously and may tweak pricing around the edges, but most will wait for Budget clarity before making any bold moves.
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Editor
Ben Perks
Managing Director at Orchard Financial Advisers
Inflation is flat, much like the atmosphere in the property market. Whilst this may be welcome news for interest rates, many borrowers are waiting for the Budget next month before making a move. Figures can be reassuring but the country is really waiting to see if Reeves will topple Truss as the Queen of Bad Budgets.
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Editor
David Stirling
Independent Financial Adviser at Mint Wealth
September’s inflation figure of 3.8% offers little comfort for borrowers. Core prices remain stubbornly high, which means mortgage lenders are most likely to hold rates steady until the Budget provides clarity. Any cuts will probably be modest and selective, leaving most households facing elevated borrowing costs for the foreseeable future. Rachel Reeves' delayed Autumn Budget continues to be the elephant in the room, as we all wait for the widely anticipated turmoil and tax hikes to be unveiled.
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Editor
Dariusz Karpowicz
Director at Albion Financial Advice
Looking for mortgage relief? September's flat 3.8% inflation offers breathing space, not breakthroughs. This steady reading might nudge SWAP rates down slightly and encourage cautious lenders to trim fixed deals by modest amounts, but don't expect fireworks before the Budget.
The reality bites harder than headlines suggest. With core inflation sticky at 3.5% and housing costs refusing to budge, your mortgage pain continues. Lenders will watch nervously until Rachel Reeves reveals her Budget cards next month. For the 750,000 borrowers facing renewal in six months, now might be wise to secure rates before any Budget surprises push them higher.