The final months of 2025 look set to be busy for mortgage brokers, with around 446,000 fixed-rate deals coming to an end - of which a significant chunk are two and five-year fixes.
Many customers renewing will likely fall into two camps: those welcoming what they consider better terms, and others disappointed at how high borrowing costs have climbed.
The former are households that took out two-year fixed mortgage rate deals when rates soared during the cost of living crisis, while the latter include those that signed ultra low-interest five-year fixes during or just after the Covid-19 pandemic.
In potentially encouraging signs for mortgage holders, hopes for an interest rate cut before the end of the year got a lift this month when data showed inflation stayed at 3.8 per cent in September. It had been forecast to rise as high as 4 per cent.
Ying Tan, chief executive of online mortgage broker Habito, told The Independent: “Markets have already priced in a possible Bank of England rate cut this year, and swap rates reflect that cautious optimism. Unless inflation data surprises to the upside, we could see a cut before year-end, with mortgage pricing nudging slightly lower as lenders compete for volume.”
How many renewals and new deals could be sought?
There are a total of 446,169 fixed mortgage deals that end in the final quarter of 2025, Financial Conduct Authority(FCA) figures show.
They range from sub-2 per cent, to above 7 per cent interest rates.
Looking at five-year fixed-rate mortgages, analysis by money saving app Nous found an estimated 218,000 households are coming to the end of these between October and December.
Some 138,000 are coming to the end of two-year fixes in the same period - they’ll be hoping for a notable drop in repayments.
Greg Marsh, chief executive of Nous, says: “We’re seeing a spike in households coming off five-year fixed-rate mortgages. The rush to buy during the pandemic ‘race for space’ and stamp duty holiday led to a surge in transactions in late 2020, with almost half of borrowers locking in longer-term deals which are now coming to an end.”
How much could costs change for homeowners?
Analysis for The Independent by property consultancy CBRE provides examples of how much borrowers’ costs could change. Scott Cabot, the firm’s head of residential research, said:
“Mortgage rates have been falling relatively steadily since the start of 2025. They are now significantly lower than where they were two years ago, meaning households that are coming to an end of their two-year fixed term can expect to see a reduction in their monthly payments when renewing their mortgage.”
The table below shows average two-year and five-year fixed rates for 75 per cent loan to value (LTV) mortgage products:
2-yr fix, 75% LTV |
5-yr fix, 75% LTV |
|
|---|---|---|
31 January 2020 |
1.41% |
1.68% |
30 September 2020 |
1.75% |
1.92% |
31 January 2023 |
5.14% |
4.66% |
30 September 2023 |
5.92% |
5.24% |
30 September 2025 (most recent) |
4.19% |
4.18% |
Cabot adds: “Crucially, the peak in mortgage rates came in summer of 2023. As we have just passed the two-year anniversary of this, it will mark a significant turning point for household finances.”
But for households coming to the end of a five-year fixed term, rates are now higher.
“These households would have secured ultra-low mortgage rates in 2020, when the base rate was cut to a historic low to fuel greater consumer spending and economic growth during the pandemic,” he notes.
Looking at possible scenario case studies, CBRE estimates:
- If a borrower took out a five-year fixed deal of 2.05 per cent in October 2020 on a loan of £225,000 towards a £300,000 property, that would equate to payments of £837 per month. At September 2025’s average five-year rate of 4.18 per cent they could expect to pay back £1,098 per month - or £3,132 more per year.
- If a borrower took out a two-year fixed deal of 5.6 per cent in October 2023 on a loan of £225,000 towards a £300,000 property, that would equate to payments of £1,292 per month. At September 2025's average two-year rate of 4.19 per cent they could expect to pay back £1,099 per month - or £2,316 less per year.
What mortgage conditions are looking like
As at 24 October 2025, the average two- and five-year fixed rates were 4.97 per cent and 5.02 per cent respectively, according to Moneyfacts.
There can be no guarantees on what lenders will offer in coming weeks and how rates will look after the Autumn Budget is delivered on November 26, so individuals will need to weigh up their risk appetite for deals. In the past week, three major lenders have nudged rates lower on some select deals.
Matt Henderson, residential research lead at estate agents Strutt & Parker, commented: “In an uncertain marketplace, the certainty of a five-year fix may appeal to some, particularly those who feel we may have few shocks on the horizon, while those more confident in market stability may be able to justify the two-year fix.”
Matt Smith, property website Rightmove’s mortgages expert, says: “Those who have reserved new rates already have certainty. Broadly speaking, the financial markets are currently expecting rates to gradually lower in the coming months and into next year. So, in the short-term, they may see marginally better rates become available, but where possible brokers and lenders should be able to accommodate them going into the new year.”
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