Pricing in financial markets suggest we could see as few as two cuts to the base rate before the end of 2025. That said, the past year has shown us how quickly conditions can change.

The Bank of England opted to hold the base rate at 4.75% today. The decision ensures that lenders will hold mortgage rates largely steady until the new year.

It’s been another volatile year for borrowers. Repeated shifts in the inflation narrative, new government fiscal policies and geopolitical events have all buffeted the mortgage market to varying degrees.

For now, at least, it looks like 2025 will be a quieter year. Pricing in financial markets suggest we could see as few as two cuts to the base rate before the end of the year due to persistent wage growth that is incompatible with inflation remaining at the Bank of England’s 2% target. That said, the past year has shown us how quickly conditions can change – potential tariffs set by incoming US president Donald Trump may introduce a new bout of volatility to global borrowing costs.

TDuring volatile periods, borrowers can save significant sums by speaking to a mortgage broker that covers the entire market. Lenders are competing fiercely for market share, changing rates or criteria at very short notice. The best deal for you can change, week-to-week.

Industry body UK finance expects mortgage lending to expand by 11% next year to hit £260 billion, driven in large part by a surge in remortgaging activity. Many people have deals coming to an end, which should fuel a 30% rise in the total amount lent for remortgaging.

Retaining customers will be a key focus for the lenders during 2025. Many have failed to hit lending targets for several years and are eager to retain existing customers while growing their market share. This will produce opportunities for borrowers to secure better deals as competition ramps up. We think it’s wise to speak to a broker up to six months before your current deal ends to assess your options.

If you are considering purchasing or remortgaging a home, please get in touch with one of our experienced brokers. We have relationships with over 200 lenders and we’d be happy to walk you through your options.