A (Christmas) Word On The Mortgage Market

A (Christmas) Word on the Mortgage Market

Hello and welcome to the final edition of a word on the mortgage market for 2025. We hope you are very much looking forward to the festive break. We certainly are.

On that note, before we give you a final market update for the year, we just wanted to take the opportunity to wish all of our clients a very Merry Christmas and a Happy New Year. It has been a pleasure helping you navigate your mortgage needs throughout 2025, and we very much look forward to continuing to do that in 2026.

Now, we realise that at this time of year, time is normally a little tight (to say the least!). We’ve still got 27 presents to buy so we get it. So, this is going to be a short and sharp update that tells you what you really need to know. Call it our Christmas present to you. Sort of.

Let’s jump in.

The Economic Picture

Yesterday, the Bank of England delivered its latest Base Rate decision. While there had been plenty of speculation in the run up, the outcome was very much in line with expectations, with a cut to 3.75%. This takes Bank Rate to its lowest level in three years.

Looking ahead, the broader message remains one of cautious optimism. Inflation remains on a downward path, and data published on Wednesday showed November inflation falling sharply to 3.2%, reinforcing the view that price pressures are continuing to ease. The Bank says that following the tax and spending policies announced in the government's Budget last month, and easing oil and gas prices, it now forecasts inflation to fall "closer to 2%" - the Bank's target - in the spring or summer of next year.

Previously, it did not expect this to happen until 2027.

And while economic conditions remain mixed, there is growing confidence that the direction of travel for interest rates will be continue downward. We continue to expect at least one further Base Rate cut in 2026, and possibly two, although the precise timing remains uncertain.

As ever, future decisions will be shaped by a range of factors, including inflation data, wage growth, economic activity and global developments. The Bank of England will continue to balance the need to support growth with its commitment to price stability, moving only when it believes conditions are right.

It is also worth remembering that Bank Rate is just one part of a much wider picture. Financial markets, swap rates and lender funding costs all play a role in how mortgage rates are priced. As a result, changes to Base Rate do not always translate directly or immediately into changes in mortgage products.

What should borrowers do now

For borrowers, the most important factor is not just the Base Rate itself, but how lenders interpret the outlook and how confident they feel about what lies ahead. Lender appetite, pricing strategy and product availability can shift independently of headline rate announcements.

This is why keeping in regular contact with your adviser remains so important. Whether you are approaching the end of a fixed rate, thinking about moving home, reviewing borrowing for the future or simply wanting reassurance that you are still on the right track, an early conversation helps keep options open.

Acting early allows time to explore the market properly, assess different product types and consider how potential rate movements could affect your plans. It also reduces the risk of being forced into decisions under pressure when deadlines approach.

There is no one size fits all solution. Your personal circumstances, future plans and appetite for risk are unique, and your mortgage strategy should reflect that. Even when nothing feels urgent, a simple check in can often make a meaningful difference when the time comes to take action.

It’s good to talk

We very much hope you've found A (Christmas) word on the mortgage market useful and interesting. If you'd like to discuss anything we've talked about. Or indeed if you have any other mortgage related needs, then please do get in touch with your adviser. Until next time, we bid you adieu and once again wish you a very Merry Christmas and a Happy New Year!

Your consultant: Ricki Wenn
Give them a call:  07816 604 798
Send them an email:  rickiw@mortgageforce.co.uk

All that legal jazz

Of course, you know this, but it never hurts to remind you that:

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP REPAYMENTS ON YOUR MORTGAGE OR OTHER LOANS SECURED UPON IT.

We should also remind you that if you have an interest-only mortgage please make sure you have a suitable and viable method to repay your mortgage at the end of the term.

And some of the products contained in this newsletter are non-regulated, such as Buy to Let mortgages and, accordingly, the protection that is normally afforded on regulated products do not apply.

Interest rates may go up as well as down. Make sure you can afford your mortgage repayments and review your budgets frequently. Should you experience or foresee any difficulties, speak to your lender immediately. For advice in relation to your circumstances on a specific matter, please ask us for a personal illustration.

Each advising firm is owned independently and they will set out the way they work in the initial disclosures to you and are directly authorised and regulated by the Financial Conduct Authority. Mortgage Force (UK) Ltd is registered in England and Wales No: 09394027.