Interest Rates – November 2025 Summary

The past month has seen a steady period for the Bank of England but a busy one for lenders, with many making targeted rate reductions across their mortgage ranges.

Below is a summary of the key movements in interest rates, mortgage pricing and inflation.

Bank of England Holds Base Rate at 4%

The Bank of England has once again voted to hold the Base Rate at 4%, marking another month of stability for borrowers.

This decision was widely anticipated, with policymakers signalling that inflation pressures are easing, but not enough to justify a rate cut right now.

The latest update highlighted that although headline inflation had started to move in the right direction, underlying drivers such as wage growth and service sector pricing are still running above the Bank’s preferred levels.

This means the MPC is continuing to take a cautious approach, aiming to balance:

• Supporting economic growth
  
• Preventing inflation from becoming embedded
  
• Avoiding premature cuts that could undo progress

The committee noted that it needs “more consistent evidence” that inflation will fall sustainably back to the 2% target before cuts can be considered. For homeowners, this stability (even without reductions) has provided a more predictable environment than earlier in the year.

Periods of stability tend to encourage lenders to compete, and we are beginning to see this in mortgage pricing, with several high street banks trimming rates across their ranges.

Looking ahead, the MPC confirmed that future decisions will remain data-driven, meaning winter inflation figures and labour market trends will heavily influence the first move in 2026.

You can view upcoming MPC dates here – Bank of England MPC Dates

Mortgage Rates – Cuts Continue Across the Market

Over the last few weeks, several major lenders have introduced further rate reductions across residential and buy-to-let products, despite wider economic uncertainty.

A summary of some of the key points –

• Barclays – Barclays introduced reductions across selected products, including cuts at higher loan-to-values.
• HSBCHSBC made cuts across both residential and buy-to-let ranges, signalling increased competition among high street lenders.
• LTV Pricing Improvements- Moneyfacts reported that some of the biggest reductions this month were at 70% LTV, where several lenders improved mid-range pricing.
• West Bromwich Building Society – West Brom reduced selected rates for first-time buyers and remortgage customers.
• Santander and NatWest- Both lenders introduced further reductions, including new-business and product-transfer rates.
• Nationwide – Nationwide reduced several fixed-rate deals.

Average Mortgage Rates Continue to Edge Down

According to Moneyfacts, the average mortgage rate has now fallen below 5%, marking a notable milestone for borrowers after months of higher pricing.

This reflects both falling funding costs and increased lender competition.

There are also signs of a “mini price war” on the high street, with various banks reducing rates to attract business.

Inflation and Budget Uncertainty

Recent commentary suggests that some short-term rate increases were influenced by pre-Budget caution.

Broadly, mortgage rates continue to trend downwards despite the uncertainty.

Our Thoughts

This month continues to reflect a gradual but encouraging improvement in mortgage pricing.

• The stable Base Rate has provided a solid backdrop for lenders.
  
• A number of high-street banks have reduced fixed rates across a range of LTVs.
  
• Sub 5% averages have returned to the market, offering some relief to remortgagers.
  
• Affordability remains tight for many households, but lender competition is helping.

For borrowers coming to the end of a fixed rate:

Securing a deal early, with the option to switch to a cheaper product later, remains a sensible strategy.

Looking ahead:

If inflation continues its downward trend, we expect further incremental price improvements. However, sharp cuts remain unlikely in the short term.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Information correct at time of writing – November 2025.

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