The Benefits of Falling Mortgage Rates for UK Borrowers

The UK mortgage market has witnessed significant shifts over the past few years, with rising interest rates causing concern for many borrowers. 


The Bank of England (BOE), responsible for setting the official bank rate, has increased interest rates with 14 consecutive rises since December 2021. This trend was a response to the rise in inflation. But the BOE surprised many when it decided to freeze the interest rate at 5.25% in September 2023. This decision was influenced by the Office for National Statistics’ report showing a decline in inflation, which fell to 6.7% in August, from a previous 6.8% in July and 7.9% in June. [1]



The Good News for Borrowers

This recent freeze in interest rates offers a glimmer of hope for mortgage seekers. As inflation shows signs of cooling, fixed-rate mortgage costs have started to descend from their peak. 



The Implications for Homeowners

Fluctuating bank rates has a significant impact on borrowers. An estimated 1.4 million homeowners in the UK are on tracker rate deals. [2] These individuals have experienced almost immediate impacts on their monthly repayments with every bank rate adjustment. 


However, not all homeowners are equally affected. Those on fixed-rate deals remain protected from these fluctuations for the duration of their deal. Yet, they should remain vigilant, as once their term ends, the new deals might come at a higher cost. About half of the 4.2 million people with regulated mortgages on fixed rates will reach the end of their deal this year or next. Although a rise in the bank rate might not immediately change their mortgage expenses, many will start feeling the effects before long. [2]



The Housing Market

The property market hasn’t been immune to changes either. Recent reports indicate significant drops in UK property values, the most pronounced in over a decade. For instance, Halifax reported a 4.7% year-on-year drop in average house prices in September, marking the most substantial decline since 2009. [3]



A Cautionary Note on Inflation

Though inflation rates are declining, it’s essential to remain cautious. The Consumer Prices Index (CPI) measure of inflation shows a drop to 6.7% in the 12 months leading to August. However, this is still significantly higher than the government’s target for the Bank of England, set at 2%. [4]






While the current trend in falling mortgage rates for UK borrowers offers a sigh of relief to potential borrowers, it’s crucial to remain informed and seek expert advice. As rates evolve, having a clear understanding of the market can help borrowers make informed decisions that suit their financial situation best. 


Your financial wellbeing is directly affected by the changing mortgage rates . As we navigate through these evolving market conditions, having a professional by your side can make a significant difference. Whether your fixed-rate mortgage term is ending soon or you’re on a variable rate, a mortgage adviser can provide tailored advice to help you make well-informed decisions.


Don’t let the fluctuating market catch you off guard. Speak with us to explore your options and find a mortgage deal that aligns with your financial goals. Your path to a secure financial future is just a conversation away.





Status Mortgage Services is a trade name of Status Financial Services Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.


Approved by The Openwork Partnership on 07/11/23




[1] Office for National Statistics – Consumer price inflation, UK




[3] Halifax – Halifax House Price Index September 2023


[4] Office for National Statistics – Consumer price inflation, UK: September 2023