As interest rates continue to fall, all major lenders have fixed-rate deals available with interest rates of less than 4%. In other mortgage news, the Financial Conduct Authority has launched a public discussion on the future of the mortgage market.
Reductions in interest rates charged by mortgage lenders are taking into account predicted future cuts in interest rates, as well as those already in effect. It is suggested that mortgage rates may fall a little further, but this is not guaranteed. Rates fell on 1 August 2024 and have fallen three times since then to the current rate of 4.25%.
The Governor of the Bank of England, Andrew Bailey, told MPs that UK interest rates are more uncertain because of Donald Trump’s chaotic trade policy. Looking forwards, he said: “the path remains downwards, but how far and how quickly is now shrouded in a lot more uncertainty, frankly.”
Borrowers reaching the end of fixed mortgage deals will need to decide when to remortgage. Moneyfacts says that the average rate for a two-year fixed deal has fallen to 5.21%, and for a five-year deal, 5.12%.
Sub-4% deals may only be available to borrowers with a substantial amount of equity in their homes or to buyers with substantial deposits.
Mortgage news – FCA discussion on mortgages
On 4 June 2025, the Financial Conduct Authority concluded a public discussion on the mortgage market.
The aims are to make it easier, faster and cheaper for borrowers to make changes to their mortgage.
A consultation paper published in May details the FCA’s desire to make it simpler for consumers to discuss their needs with mortgage providers and take steps such as reducing their mortgage term or moving to a new lender.
It is suggested that the costs of borrowing could be lowered and the balance of mortgage debt held in later life could be reduced, with customers able to access the best value loans more easily.
The FCA stated, “We also want to make mortgage regulation simpler, reducing the different sources firms have to check to understand our regulatory expectations.”
It is considering working with lenders to assess the impact of changes as well as potentially carrying out consumer research.
The FCA believes there is potential to “provide greater opportunity for innovation”, stating, “Our five year strategy commits to helping people navigate their financial lives and supporting the competitiveness of financial services. Now with the introduction of the Consumer Duty which sets clearer, up-to-date standards in financial services, we want to remove guidance that’s no longer required and provide greater opportunity for innovation.”
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