Is Now the Time to Fix Your Mortgage Rate in 2025? Here’s What You Need to Know
By Samuel Mather-Holgate
In a year of economic uncertainty, many homeowners and buyers are asking the same question: should I fix my mortgage rate now, or wait?
With interest rates held at 4.25% and speculation swirling about when they’ll fall again, it’s not an easy decision. Add in global tensions, rising oil prices, and inflationary pressures — and you’ve got a financial climate that’s harder to read than ever.
In this article, we’ll help you understand:
What fixing your mortgage actually means
Why rates might (or might not) come down in 2025
What to consider before locking in a deal
Why professional advice can save you money in the long run
❓ What Does It Mean to Fix Your Mortgage Rate?
When you fix your mortgage, you lock in a set interest rate for a defined period — usually 2, 3, 5, or 10 years. This means your monthly repayments stay the same, regardless of what happens to the Bank of England base rate.
Fixed-rate mortgages give peace of mind in volatile markets, but they can be more expensive than variable or tracker options — especially if interest rates fall while you’re locked in.
✅ Fixed rate = stability
❌ Downside = you could miss out if rates drop
Variable or tracker mortgages, on the other hand, rise and fall in line with interest rates, which means your monthly payments can change — sometimes significantly.
Why Have Rates Been Held – And Will They Drop Soon?
The Bank of England voted to hold the base rate at 4.25% in its June 2025 meeting, after four gradual cuts from a peak of 5.25% in 2024.
But several major forces are keeping policymakers cautious:
1. Rising Inflation
Despite earlier progress, inflation climbed to 3.4% in April, and is forecast to rise slightly before easing in 2026. That’s still well above the BoE’s 2% target. Source: Bank of England
2. Global Oil Price Spike
Tensions in the Middle East have escalated after recent Israeli & US airstrikes on Iran, raising fears of wider conflict and triggering a surge in global oil prices. Since energy costs heavily influence UK inflation, the BoE is hesitant to lower rates further and risk fanning the flames.
3. Slowing UK Growth
The UK economy contracted by 0.3% in April, wage growth has softened, and unemployment is ticking up — all signs that a recession is possible. Source: ONS
The next rate decision is due 7 August 2025, and while markets expect a cut, uncertainty remains.
Should I Fix My Mortgage Now? 5 Key Questions to Ask
There’s no one-size-fits-all answer, but these five questions will help you make a smart, personalised decision:
1. When Does Your Current Deal End?
If your mortgage is due for renewal in the next 6 months, it’s time to start shopping around.
2. Can You Afford Higher Payments If Rates Stay High?
A tracker might seem cheaper now — but can you handle a rise if markets are wrong?
3. Do You Plan to Move or Overpay?
Fixed deals often have early repayment charges. If you’re selling or want flexibility, you may need a more agile product.
4. Are You in a Stronger Position Than Before?
A bigger deposit or improved credit score could open up better deals — worth reviewing with your adviser.
5. Do You Want Peace of Mind?
Sometimes, fixed deals offer psychological as well as financial stability — especially if you’re budgeting tightly.
Example Scenarios: What Would You Do?
Sarah and Mark are on a tracker and seeing monthly payments rise and fall unpredictably. With a baby on the way, they’ve opted for a 5-year fixed deal to give their budget some breathing room.
Jamie, a first-time buyer, is tempted by a low 2-year tracker. But he’s nervous about geopolitical uncertainty and chooses a competitive 3-year fix with no ERCs after year one.
Donna, remortgaging a buy-to-let, chooses a 2-year fix to keep options open while still hedging against volatility.
What the Experts Say
Economists and mortgage professionals are divided — just like the BoE’s Monetary Policy Committee, which voted 5–4 to hold rates in May and 6-3 to hold them in June.
“We think rate cuts are still on the table for August and November, but global risks like energy costs and trade policy are muddying the waters.”
— Zara Noakes, JP Morgan Asset Management
“If inflation holds steady and the economy weakens further, we’ll see cuts. But the Bank is playing it safe for now.”
— Ellie Henderson, Investec
Mortgage pricing is also influenced by swap rates — what lenders expect rates to do — which means some deals are already improving ahead of any BoE action. Source: Moneyfacts
Why You Should Speak to a Mortgage Adviser
With dozens of variables at play — from your loan-to-value ratio to future income — getting independent mortgage advice matters more than ever.
At Mather & Murray Financial, we’ll help you:
Understand the pros and cons of fixed vs variable
Access exclusive broker-only deals
Run the numbers on overpaying, moving or remortgaging
Protect your family with appropriate life or income cover
✅ Conclusion: Fix, Float or Get Advice?
No one has a crystal ball — but in an unpredictable market, informed decisions are the best defence. Fixing your mortgage rate now could save you stress, and even money, if uncertainty continues. But in some cases, waiting may still be wise.
The best way to find out? Talk to a mortgage expert who knows the market, and your situation.
Need help reviewing your mortgage?
Mather & Murray Financial
01793 261626 or BOOK A CALL BACK
CONTACT US HERE
