Where will mortgage rates go?

The general consensus is that the base rate should fall to between 3-3.5% over the next 12 months, with a couple of possible rate cuts in 2025. This is assuming no massive world upsets from tafiffs, inflation, war, plague or pestilence, which have dogged rates ever since Covid.

The economy is not running on turbo, so rates are expected to be cut further. The Bank of England want to go slow so gradual reductions over the next 12 months are expected. If nothing drastic happens in the global economy, which seems unlikley, rates will bottom out around autumn 2026.

it is hard to see where rates will go as there are too many external factors however I think they will come down. Fluctuating fixed rates and an element of market uncertainty still exists but a boost is much needed so I think we will start to see things in the mid to late 3's before the end of the year.

Right now, the cheapest two-year fixes at 60% loan-to-value are around 4%, and we don’t expect a sharp drop anytime soon. Whether rates fall further depends on inflation cooling and the Bank of England gaining confidence to cut. If government borrowing is kept under control and inflation starts to ease, we could see rates fall into the mid-threes by mid to late 2026. But after the latest inflation data, the Bank is likely to stay cautious and wait for clearer signs before making any big moves.