90% probability of Bank of England base rate cut in December - but will fixed mortgages get cheaper?

by Aaron Strutt

Nov 27 2025

There is a strong chance the Bank of England (BoE) base rate will be lowered from 4% to 3.75% on the 18th December, with money markets reportedly assigning a 90% probability to the reduction. Further rate easing is expected next year, given the headwinds facing the economy.

There was not much joy in the Chancellor's Budget, but it does potentially give the Bank of England's Monetary Policy Committee scope to lower the base rate a few more times. 

Aaron Strutt, product director at Trinity Financial, says: "The Bank of England base rate is not at 3.5% yet, as many expected, but mortgage rates are still getting cheaper. Santander for Intermediaries has a range of 2-, 3-, and 5-year fixed rates around 3.6%, and Nationwide and Halifax have lowered their fixed rates again today.

"If the base rate comes down again, I suspect mortgage rates will get even better next year, especially as banks and building societies have such a strong appetite to lend at the moment." 

Will fixed-rate mortgages get cheaper if the Bank of England cuts its base rate?

It’s a question many homeowners and buyers are asking — and the answer is: sometimes yes, but not automatically.

Why fixed-rate mortgages don’t automatically get cheaper

• Fixed-rate mortgages lock in a set interest rate for a fixed period (e.g. 2, 3, 5, or more years). During that fixed period, your rate — and therefore your monthly payment — doesn’t change, no matter what the BoE base rate does.
• Even for new fixed-rate deals, lenders don’t simply copy the BoE base rate. Instead, they set fixed rates based on a mixture of factors — including their cost of raising funds in wholesale markets or via “swap rates,” market expectations for inflation, and overall demand for mortgages.
• The BoE base rate influences the interest rates banks charge each other, which in turn shapes how expensive lending is.
• For variable-rate or tracker mortgages, a cut in the base rate often leads directly to lower payments — banks and building societies tend to pass on reductions to those rates.

When should you lock into a fixed rate?

A lower base rate tends to reduce the overall interest rate environment: cheaper borrowing costs for banks, lower inflation expectations, and reduced mortgage funding costs. Over time, this can persuade lenders to lower fixed-rate offerings to attract borrowers.

If your mortgage is coming up for renewal soon, or you are buying a property, it makes sense to secure a mortgage rate and then switch to your lender's lower rates when they become available. This is especially important if you are opting for a longer-term fixed deal or have a larger mortgage loan. Trinity's brokers can help you secure a competitively priced product and ensure you do not pay more than necessary.

Source: 90% chance of a BoE base rate cut highlighted by a private bank in its latest mortgage update

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