Following the Bank of England’s decision to cut rates today, Matt Smith, Rightmove‘s mortgage expert comments.
“As expected we now have the third Bank Rate cut of the year, with the Bank continuing along its forecast trajectory. Mortgage lenders have had a bit of room to reduce rates over the last week, owing to the ongoing developments around global tariffs. However, we expect that lenders will use the headline of today’s cut as the catalyst to reduce their rates a little further, though lender competition remains fierce and we don’t expect major rate drops.
Lenders have been competing for business in a market which has the largest supply of homes for sale in a decade. A combination of rate cuts and changes to buyer affordability criteria are helping many home-movers to responsibly borrow more towards the home that they want.
The market expects there will be one more Bank Rate cut before the end of the year, with an outside chance of two. Any further cuts would likely see this cycle repeat again – with lenders using it as an opportunity to reduce rates a little more. It bodes well for the second half of this year, with further mortgage rate reductions and stable prices likely to encourage more activity.”
Data
- Rightmove’s analysis shows that the typical first-time buyer monthly mortgage payment is nearly £100 less than at this time last year
- The average first-time buyer mortgage payment is currently £909 per month, versus £1,002 per month last year
- The average two-year fixed mortgage rate for someone with a 20% deposit has lowered from 5.21% at this time last year, to 4.38% now
- Meanwhile, the average asking price for a typical first-time buyer home has remained flat and is now £227,466, while average earnings have increased by 5% compared to last year
- In London, a first-time buyer could be looking at a saving of £240 per month on a mortgage compared with this time last year
- Aberdeen, Hull & Carlisle are the lowest priced cities for first-time buyers to get onto the ladder, while London, St. Albans & Cambridge are the most expensive
Rates
Average rates for 2-year and 5-year fixed-rate mortgages
| Term | Average rate | Weekly change | Yearly change |
| 2-year fixed | 4.50% | -0.01% | -0.73% |
| 5-year fixed | 4.50% | -0.01% | -0.35% |
Lowest rates for 2-year and 5-year fixed-rate mortgages
| Term | Lowest rate | Weekly change | Yearly change |
| 2-year fixed | 3.69% | +0.00% | -0.50% |
| 5-year fixed | 3.84% | +0.00% | +0.01% |
Average fixed-term mortgage rates for home-buyers with 5-10% deposits
| Loan to Value (LTV) | Term | Avg rate 31 Jul 2025 | Avg rate 07 Aug 2025 | Weekly Change | Yearly Change |
| 95% | 2-year-fixed | 5.19% | 5.19% | +0.00% | -0.75% |
| 95% | 5-year-fixed | 5.13% | 5.12% | -0.01% | -0.38% |
| 90% | 2-year-fixed | 4.73% | 4.73% | +0.00% | -0.86% |
| 90% | 5-year-fixed | 4.67% | 4.66% | -0.01% | -0.46% |
Average fixed-term mortgage rates for home-buyers with 15-25% deposits
| Loan to Value (LTV) | Term | Avg rate 31 Jul 2025 | Avg rate 07 Aug 2025 | Weekly Change | Yearly Change |
| 85% | 2-year-fixed | 4.41% | 4.40% | -0.01% | -0.84% |
| 85% | 5-year-fixed | 4.41% | 4.40% | -0.01% | -0.47% |
| 75% | 2-year-fixed | 4.31% | 4.32% | +0.01% | -0.72% |
| 75% | 5-year-fixed | 4.36% | 4.36% | +0.00% | -0.32% |
Average fixed-term mortgage rates for home-buyers with 40% deposits
| Loan to Value (LTV) | Term | Avg rate 31 Jul 2025 | Avg rate 07 Aug 2025 | Weekly Change | Yearly Change |
| 60% | 2-year-fixed | 3.90% | 3.89% | -0.01% | -0.64% |
| 60% | 5-year-fixed | 4.02% | 4.02% | +0.00% | -0.10% |
These rates are provided by Podium and are an average based on 95% of the mortgage market. All rates are based on products with a circa £999 fee.
