If you’ve been waiting for a sign to move home, this could be it! The average two-year fixed mortgage rate has fallen below 5% for the first time since September 2022.
The average rate is now 4.99% (August 13th, 2025).
The recent fall comes after five base rate cuts since last August, with the Bank of England’s rate now at 4%.
What a Lower Mortgage Rate Means for Buyers
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Lower monthly repayments – The same property now costs less to finance each month, improving affordability.
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Bigger borrowing power – You may qualify for a higher loan amount without stretching your budget.
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More choice – Lower rates can open up areas or property types that were previously out of reach.
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Increased competition – More buyers can afford to enter the market, which means you might need to act quickly on the right home.
What a Lower Mortgage Rate Means for Sellers
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More motivated buyers – With cheaper borrowing, more people are in a position to purchase.
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Potential for stronger offers – Buyers may have more room in their budgets to bid competitively.
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Faster sales – Increased affordability can mean less time on the market.
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Stable or rising prices – If demand rises, prices often hold steady or increase modestly.