Mortgage rates in the United Kingdom have fallen to their lowest level since September 2022. This marks the first time the average five-year fixed rate has dipped below 5% since May 2023, according to new data from Moneyfacts.
The financial information provider reports the average two-year fixed rate is now 4.86%. The average five-year fixed rate stands at 4.91%. This significant drop reflects growing lender confidence in an imminent Bank of England (BoE) interest rate cut.
The steep decline is directly linked to market expectations. Lenders now anticipate the BoE will soon lower its base rate from 4% to 3.75%. This expectation is fueling competition and driving down consumer borrowing costs.
Some experts predict that further rate reductions will come in the next few weeks
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— The i Paper (@theipaper) December 8, 2025The Moneyfacts Average Mortgage Rate fell from 4.99% to 4.91% month-on-month. It also fell 0.53% year on year from 5.44% in December 2024.
Rachel Springall, a finance expert at Moneyfacts, highlighted the positive trend in November. She noted it was particularly favourable for fixed-rate cuts. The average two-year fixed rate saw its largest monthly decline since August. The five-year fixed rate recorded its deepest fall in over six months.
This competitive environment has accelerated market activity. The average shelf-life of a mortgage product has shortened to just 18 days. Meanwhile, the number of available mortgage deals has risen to over 7,000, giving borrowers more choice.
