As 2025 concludes, the UK mortgage market presents a picture of stability, with average fixed-rate offerings largely unchanged in the final week of December. Potential homebuyers and those considering remortgaging will note that while the Bank of England’s Base Rate remained at 4% in November, market predictions had hinted at a possible reduction earlier in the month, subject to broader economic conditions. Inflation figures for November also saw a welcome drop, falling to 3.2%.

Average UK Mortgage Rates: End of 2025

According to data updated on 31 December 2025 (source: Rightmove), average rates for both two-year and five-year fixed-rate mortgages have seen no weekly movement. The average two-year fixed rate stands at 4.31%, representing a 0.75% decrease over the past year. Similarly, the average five-year fixed rate is currently 4.39%, down 0.42% annually. For those seeking the most competitive deals, the lowest available two-year fixed rate is 3.47%, and the lowest five-year fixed rate is 3.69%. These figures, provided by Podium, represent an average across 95% of the mortgage market, typically with a product fee of around £999.

How Your Deposit Affects Mortgage Rates (LTV)

The size of your deposit significantly influences the interest rate you’ll secure. This is expressed as a Loan to Value (LTV) percentage, where a lower LTV (meaning a larger deposit) generally translates to more favourable rates.

For Borrowers with Smaller Deposits:

• 5-10% Deposit (95% LTV): Average two-year fixed rates are at 4.98%, with five-year fixed rates at 4.99%. Both saw a slight 0.01% increase this week.
• 10-15% Deposit (90% LTV): Average two-year fixed rates are 4.48%, and five-year fixed rates are 4.51%. The two-year rate saw a 0.01% weekly rise.

For Those with Larger Deposits:

• 15-25% Deposit (85% & 75% LTV): An 85% LTV borrower could expect a two-year fixed rate of 4.23% and a five-year fixed rate of 4.33%. For 75% LTV, these figures are 4.10% and 4.21% respectively.
• 40% Deposit (60% LTV): The most attractive rates are available here, with two-year fixed at 3.73% and five-year fixed at 3.94%, both unchanged from the previous week.

Economic Outlook and Rate Predictions

The broader economic landscape continues to shape mortgage rate expectations. While the Bank of England maintained its Base Rate at 4% in November, market analysts had anticipated a potential 0.25% reduction at the final meeting of 2025, scheduled for 18 December. However, any significant drops in mortgage rates remain contingent on various factors, including sustained low inflation, falling swap rates, and a stable economic environment free from unexpected disruptions.

Final Thoughts

While current mortgage rates have stabilised as the year closes, prospective homeowners and those looking to remortgage should remain vigilant regarding economic developments and their potential impact on future rates. Utilising online tools like mortgage calculators and obtaining a Mortgage in Principle can provide personalised insights into affordability and borrowing potential. It is always advisable to consult with a regulated mortgage adviser for tailored financial guidance.