Mortgage metrics: August 2025

Mortgage rates have fallen after August’s bank rate cut. The average two-year fixed rate is now 4.25%, down from 4.99% a year ago, while the five-year fixed rate is 4.18%, down from 4.49%.

Swap rates, which influence fixed-rate mortgage pricing, dipped ahead of the August meeting amid expectations of rate cuts, intensifying competition in the mortgage market, where rates are now as low as 3.7%.

Interest rates have been cut five times since last August, but a split vote at the Bank of England’s last meeting has cast doubt on another reduction, previously forecast for December 2025. Further cuts are still expected, though the pace remains uncertain.

Looking ahead, the Bank of England expects inflation to peak at 4% in September before easing to its 2% target in 2027. While mortgage rates are following the influence of the Bank’s rate cuts, they are unlikely to fall significantly.

Mortgage choice slipped to 6,842 products this month, down from July but above the 6,657 available a year ago. The average shelf life lengthened slightly to 17 days, compared with 16 days last month.

Remember, if you need advice when it comes to mortgages, a Mortgage Adviser can simplify the process, improve your chances of approval, and save you money – making them a smart choice for homebuyers. To find out more, contact the team on 03454 500200 or email hello@mortgagedecisions.com.

Source: Dataloft by PriceHubble, Bank of England, Moneyfacts