Some mortgage rates have been hiked over the past month, despite August’s base-rate cut, while “frustrated” savers have seen rates tumble, according to a financial information website.
The Bank of England kept the base rate on hold at 4% on Thursday, after having previously made a 0.25 percentage point reduction from 4.25% to 4% on August 7.
Around 900,000 fixed-rate mortgage deals are due to expire in the second half of 2025, according to figures from UK Finance, with 1.6 million fixed deals having ended or due to end across the whole of the year.
Financial information website Moneyfactscompare.co.uk said that while last month’s cut in the base rate was followed by a “cascade” of savings rates cuts, there was little movement generally in mortgage rates.
It said that the average standard variable rate (SVR) mortgage has fallen by 0.10 percentage points over the past month, from 7.42% at the start of August to 7.32% at the start of September. In September 2024, the average rate was 7.99%.
Homeowners often end up on an SVR when their initial mortgage deal ends and SVRs are set by individual lenders.
Despite the base rate cut last month, the average 10-year fixed-rate mortgage has increased, from 5.60% at the start of August to 5.67% at the start of September, Moneyfacts said. The average rate is now higher than a year ago, sitting at 5.63% in September 2024.
Between the start of August and the start of September, the average two-year fixed-rate mortgage rate on the market has edged down from 5.01% to 4.96% and the average five-year fixed-rate mortgage has nudged slightly lower from 5.01% to 5.00%.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Over the past three years, mortgage rates have been volatile, so recent cuts will please those borrowers looking to secure a new deal.
“However, uncertainties surrounding the outlook for interest rate moves have been evident over recent weeks, with volatile swap rates leading to a more cautious approach from lenders.”
She added: “Not only this, but many will be waiting with bated breath for the Budget. This waiting game, alongside forecasts for inflation to remain above target, makes it less likely for the Bank of England to make further rate cuts this year.”
Looking at the savings market, since the start of August 2025, the average easy access savings rate has fallen by 0.08 percentage points, from 2.68% to 2.60%, and the average easy access Isa rate has decreased by 0.08 percentage points, from 2.90% to 2.82%, Moneyfactscompare.co.uk said.
The average cash savings rate where notice needs to be given has fallen by 0.10 percentage points, from 3.63% to 3.53% since the start of August, while the average rate on a notice Isa has fallen by 0.12 percentage points, from 3.49% to 3.37%, the website said.
Figures released by the Office for National Statistics (ONS) earlier this week showed that the rate of the Consumer Prices Index (CPI) was 3.8% in August, the same as July.
Inflation has an eroding impact on the real value of savings pots.
Analysis by Moneyfacts of the cash savings market found 976 savings accounts in September that beat inflation, a total which is lower than the 1,606 inflation-beating deals it found in September 2024.
Ms Springall added: “Those savers frustrated to see their cash eroded by inflation might feel more inclined to secure a fixed rate bond or Isa in the coming months, with many paying a guaranteed return of 4% or more.
“It might be disheartening for savers to find the rate on their account has been cut over the past month, but now is not the time to become apathetic.”
Jenny Ross, Which? Money editor, said: “Though widely expected in light of persistent inflation, the Bank’s decision to hold interest rates will nonetheless be a disappointment to home buyers and owners coming towards the end of fixed-term deals – many of whom will likely notice a rise in monthly payments when they remortgage.
“If you’re a saver, now is a good time to review your accounts. Many banks have slashed their savings rates in recent weeks, but competitive rates are available if you shop around. With rates predicted to drop again in the coming months, consider a fixed-rate account for any cash you won’t need in a hurry.”
Matt Smith, a mortgage expert at Rightmove, said: “The later-than-usual Budget is very much on the horizon, and the markets are having to wait until the end of November for answers to the questions that are driving a lot of the current uncertainty. So, it’s not surprising we’ve seen market expectations for the next base rate cut shift from late 2025, into early 2026.
“We’ve seen average rates drift up recently, and with today’s decision unlikely to relieve the pressure lenders are feeling, we could see rates continue to rise in the coming weeks.”
Paul Broadhead, head of mortgage and housing policy at the Building Societies Association (BSA), said: “While affordability pressures remain, having good savings habits can help all households build resilience against financial shocks.
“Next week is UK Savings Week where building societies, credit unions, banks, charities and many other organisations will come together to encourage families and individuals to make the most of their money.
“With almost £300 billion of savings sitting idle in accounts paying no interest, simply moving money could put hundreds of pounds into people’s pockets.”
Andrew Asaam, mortgage director at Lloyds, said: “For people coming to the end of their current fixed rate, taking early action can help minimise the jump in monthly payments they may be expecting.
“It’s never been easier for people to switch lender to get a better deal. As well as a range of competitive remortgage products to help borrowers soften the effects of today’s higher rates.
“Acting now gives you the certainty of knowing you won’t see a bigger rise in your monthly payments than necessary, while still giving you the flexibility to choose another deal if rates continue to drop in the meantime.”
Nationwide Building Society announced on Thursday afternoon that it will cut its mortgage rates by up to 0.18 percentage points from Friday.
The reductions will apply to selected two, three and five-year fixed-rate products across its mortgage range.
Carlo Pileggi, Nationwide’s senior manager – mortgages, said: “We regularly review our rates because it’s important that, as Britain’s biggest building society, we maintain a competitive position in the market.
“These latest changes will be particularly good news for those looking to move home, with rates now starting from 3.80%, and for first-time buyers as we make a wide range of cuts across those product ranges.”
