Providing expert mortgage advice for over 28 years.
Providing expert mortgage advice for over 28 years.
Interest Rate Outlook: The Bank of England base rate is now 4.25%. This change occurred after a cut in May 2025. If UK inflation keeps going down, the Monetary Policy Committee might lower the bank rate to 4% later this year.
Government Initiatives: The government plans to build 1.5 million homes in five years. This will help make houses more affordable and easier to buy for first-time buyers.
Stamp Duty Changes: Starting in April 2025, the no-cost stamp duty for first-time buyers has been set at £300,000. This means costs will go up for homes that cost more than this.
Remortgaging Options: Homeowners, including those with Help to Buy loans, should think about remortgaging in 2025. This could help them get lower rates and better terms on their mortgages.
Housing Market Growth: Mortgage lending is expected to grow by over 3%. House prices are likely to rise a bit, between 3% and 5%. This will depend on interest rates and how many buyers are in the market.
As we approach 2025, the UK mortgage market is shifting due to changes in the economy. In recent months, we have seen more stability. There are also signs that inflation is going down. Here’s what mortgage customers can expect this year and next.
Yes, mortgage rates could go down a bit more in 2025. After the base rate dropped to 4.5% in February, many believe the Monetary Policy Committee will cut it again by the middle of 2025. This change might bring the current bank rate to about 4%.
These cuts provide welcome relief to mortgage holders. They may lead to:
Better fixed deals and lower mortgage rates.
Smaller monthly mortgage payments.
Easier access to the right mortgage rates for new buyers and those looking to remortgage.
In recent years, it has become more expensive to borrow money due to higher mortgage rates. This is because the Bank of England is trying to fight inflation. The International Monetary Fund thinks UK inflation will be under control. However, there may still be some price rises. These could be caused by supply chain problems and confusion in the global economy.
The base rate cut has reduced interest payments for those with tracker or variable rate mortgages. Mortgage borrowers need to keep an eye on bank rate decisions. They should think about securing a fixed-rate deal when they find the right deal.
The change in base rates has a big impact on mortgage interest rates. This will really matter as we approach 2025. The Bank of England has begun to reduce the base rate. Because of this change, we can expect mortgage interest rates to drop as well. When the base rate goes down, lenders often lower their mortgage rates to stay competitive. This can result in lower monthly payments for borrowers.
In previous tough times, lenders often respond to improved interest rate situations by offering new products and better fixed-rate deals. This rise in competition usually leads to more flexible terms and special offers. These changes are aimed at attracting first-time buyers, making it easier for people to own a home.
It is important for people who want to borrow money to keep up with changes. This way, they can grab any chances that appear. The economy seems to be getting steadier. Changes in base rates and mortgage interest rates will matter a lot for the housing market in the next few months. a lot for the housing market in the next few months.
With interest rates going down, lenders are giving better deals. This makes the market more competitive. It will probably lead to:
A rise in new mortgage applications
More people are getting new mortgages for their homes.
Homeowners with standard variable rates or those whose fixed rate period is ending should check their options. Lower rates could help them save money. This is very important for those who went for higher interest rates last year.
At Newhomes, our Mortgage Rate Check service helps you find good mortgage deals. If a better mortgage rate comes up, you can switch to it before you complete your mortgage. This tool is very useful for mortgage borrowers in today’s shifting market.
Note: Changing to another lender might bring extra costs. These costs can include legal fees and fees for assessing the property.
When you want to find the right mortgage rates, having a solid plan is key. Start by checking your credit score. Lenders look at it to decide how much risk they take by lending to you. A higher credit score can get you better rates and terms.
Next, compare options from several lenders. Avoid picking the first offer you see, our mortgage experts can search hundreds of mortgages from 75 leading lenders. This way, you can find the right deal that meets your financial needs.
Lastly, consider when to apply for your mortgage. Pick a time when the market is strong and interest rates are lower. This will help you get the right mortgage rate.
Keep in mind that if you do your research and understand the trends, you can find a deal that works for your budget and goals.
The Spring 2025 budget shows that the government is focused on:
Create 1.5 million new homes.
Help with affordable housing and shared ownership.
Improve public services and infrastructure for new developments.
These steps will help lower the cost of living. They want to make it simpler for people to find affordable homes, especially for first-time buyers. By concentrating on building on brownfield sites and making budget-friendly houses, we can better meet the need for homes.
As of 1 April 2025, stamp duty changes include:
Up to £125,000: 0%
£125,001 to £250,000: 2%
£250,001 to £925,000: 5%
£925,001 to £1.5 million: 10%
Over £1.5 million: 12%
For first-time buyers:
The nil-rate threshold is now £300,000.
A stamp duty of 5% applies to properties that cost between £300,001 and £500,000.
These changes could lead to higher initial costs, especially in London and the South East. However, they also aim to keep house prices stable and boost the number of homes completed before making more changes.
Buyers and homeowners should check out different programs that the government supports:
It looks like 2025 might be a great time to remortgage since fixed interest rates are dropping. Homeowners who have Help to Buy equity loans should think about switching now. This could help them avoid paying higher costs later.
Our experienced remortgage team is ready to help you at every stage. We can help you see how much you may save by changing your mortgage.
Due to falling rates and renewed buyer confidence:
Mortgage lending may go up by more than 3%.
House prices might rise by 3% to 5% across the country.
Regions such as Northern England and Scotland may do better than the UK average. On the other hand, places like London might experience slower growth. This is due to issues with prices and increasing costs for first-time buyers.
The growth in the services sector and the increase in jobs are expected to help continue this development. However, affordability is very important, especially for first-time buyers facing challenges related to the cost of living.
Many global factors still affect the UK mortgage market:
Decisions by the Federal Reserve and the European Central Bank
Changes in US interest rates
Global inflation and supply chain issues
These factors affect the Bank of England’s choices regarding money policy and inflation in the UK. With savings rates being low, people who borrow get to enjoy lower rates, particularly with fixed-rate deals.
As we think about the future, it is important to predict interest rates to understand mortgages. Economic signs suggest some cautious hope. If the Bank of England keeps lowering rates, we could see a steady decrease in borrowing costs. This change would benefit new homeowners and those looking to remortgage, as they could find better deals.
Lower interest rates often result in more loans. This can lead to an increase in mortgage applications. As inflation decreases, people might pay more attention to stabilizing the economy. This shift could also affect interest rates. It’s important for future borrowers to watch these changes closely. The changes in the economy will impact access to the right mortgage rates and terms going forward.
1. Strengthen Your Financial Position
Work on improving your credit score.
Save more money for a bigger deposit. This will help lower your loan-to-value (LTV) ratio.
2. Compare Options
Look at fixed-rate and variable-rate mortgage choices.
Align your loan duration with your financial aims.
3. Keep Up to Date
Pay attention to economic predictions.
Know how changes in interest rates can impact your mortgage payments.
4. Time It Right
Think about applying before rates go up again or lenders take away their good deals.
5. Speak to Experts
Get help from advisers who have expert knowledge of mortgages. They can help you understand these changes and find the right deal for what you need.
In 2025, there are challenges and opportunities ahead. Right now, the economy is uncertain. However, there is good news for buyers and those looking to remortgage. They can benefit from lower base rates, better mortgage options, and strong support from the government.
When the market changes, acting quickly and getting advice from experts can help you achieve the best results.
At New Homes Mortgage Services LLP, we strive to provide accurate and up-to-date information at the time of publication. However, due to the dynamic nature of the property market, details may change and this content is intended for general informational purposes only. It does not constitute financial or professional advice and should not be relied upon as such.
We cannot accept responsibility for any decisions made based on this information. For advice tailored to your individual circumstances, please consult our qualified mortgage advisors. We recommend that you independently verify any important details before making financial commitments.
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