Homebuyers express dissatisfaction and savers feel frustrated as the base rate remains unchanged
In the world of finance, there have been some significant changes in mortgage rates and savings accounts over the past month.
The average five-year fixed-rate mortgage has seen a slight decrease, moving from 5.01% to 5.00%. This small shift may not seem substantial, but for homeowners with mortgages nearing their expiry date, it could mean savings of hundreds, if not thousands, of pounds over the life of their loan. Around 900,000 fixed-rate mortgage deals are due to expire in the second half of 2025, making this change particularly relevant for many homeowners.
In contrast, the average standard variable rate (SVR) mortgage has seen a decrease of 0.10 percentage points over the past month. This decrease could mean lower monthly payments for those on SVR mortgages.
However, mortgage rates have generally increased over the past month, despite a base-rate cut by the Bank of England. This discrepancy may leave those remortgaging feeling disappointed, as stated by mortgage expert Jenny Ross. Mortgage rates are expected to continue rising in the coming weeks, according to Matt Smith's predictions.
In an effort to combat this, Nationwide Building Society is cutting its mortgage rates by up to 0.18 percentage points, effective from this Friday. The cuts will apply to selected two, three, and five-year fixed-rate products across Nationwide's mortgage range. This move is expected to benefit those looking to move home and first-time buyers.
In the savings sector, the average easy access savings rate has fallen by 0.08 percentage points since the start of August 2025. This decrease in savings rates could erode the real value of savings pots due to inflation. In response, financial advisors such as Paul Broadhead and Jenny Ross are encouraging savers to review their accounts and shop around for competitive rates.
The base rate was held at 4% on Thursday, after a reduction from 4.25% to 4% on August 7. Despite this, many fixed-rate bonds or Isas are paying a guaranteed return of 4% or more, according to Ms Springall. This discrepancy highlights the importance of reviewing savings accounts regularly to ensure they are providing the best possible return.
It's also worth noting that almost £300 billion of savings are sitting idle in accounts paying no interest, according to Paul Broadhead. This underscores the importance of actively managing savings accounts to ensure they are working hard for you.
During UK Savings Week, which is next week, Paul Broadhead encourages people to make the most of their money. He advises those coming to the end of their current fixed rate to take early action to minimize the jump in monthly payments.
In conclusion, while mortgage and savings rates are experiencing some changes, it's more important than ever for homeowners and savers to stay informed and actively manage their finances to make the most of their money.
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