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Following inflation spike, "it's hard to see how sub-4% rates will hang around for too much longer"

ended 21. May 2025

Today's inflation print came in hotter than expected and, with SONIA swaps already rising, some lenders are starting to reprice upwards. With traders now pricing in just one 0.25% cut this year, Newspage asked brokers if the market could soon be saying goodbye to sub-4% fixed rates. Views below.

6 responses from the Newspage community

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Jack Tutton
Director at SJ Mortgages
Everything is going against mortgage holders at the moment with the cost of borrowing increasing, today's inflation figures and only one more base rate cut expected this year. It's hard to see how sub-4% rates will hang around for too much longer. In just a few weeks, the market has flipped from great positivity with lenders competing to offer the lowest rates, to now one where lenders are having to increase their rates due to the increases in the cost of borrowing. This is the last thing mortgage holders want on top of all the increases we have seen in the cost of living.
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Riz Malik
Independent Financial Adviser at R3 Wealth
With recent mortgage market rate drops, it's easy to think that the rate cut party will continue indefinitely. However, those waiting for back-to-back cuts could be sorely disappointed. Hedge today, and if things improve, revisit your position where possible. That should be the mantra for those looking to refinance for the remainder of 2025.
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Aaron Strutt
Product and Communications Director at Trinity Financial
It really would not be a surprise if mortgage rates started to rise soon given the inflation figures and the increase in funding costs. We have already seen TSB and Halifax raise some fixed rates. If you are planning to take a mortgage soon or you need to remortgage I would try to get one of the cheap deals secured. We have seen the sub-4% fixes come and go many times so even if they disappear again they will no doubt be back.
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Justin Moy
Managing Director at EHF Mortgages
It seems likely that rates will tip upwards, especially if the likelihood of further base rate cuts looks to be off the table for 2025. It's definitely time to take action if your mortgage deal is due in 2025. As always it's important to be document-ready when you need a new mortgage deal, and be able to make quick decisions, especially when rates are pulled with little or no notice. Any rate changes may be small on paper, but for larger mortgages that can add up to quite a sizeable amount, and it will be worth investing some time in using your online banking to obtain statements.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
Today's inflation data, coupled with the expectation of fewer rate cuts in 2025, could prove to be bad news for borrowers. Once again, this highlights how quickly the market can turn and why anyone remortgaging or buying needs to lock into a low rate ASAP.
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Elliott Culley
Director at Switch Mortgage Finance
Nothing lasts forever and, as we have seen many times before, mortgage rates are now to increase of the back of higher than expected inflation figures. The mortgage market remains as volatile as ever and with some now only expecting one more rate cut for the year, the landscape has once again changed.