A Shifting Mortgage Market as Christmas Approaches
Monday 22 December, 2025
As the winter months draw near and the festive season approaches, the UK mortgage market is showing real momentum.
This is despite data from the Royal Institution of Chartered Surveyors (RICS) in September 2025, which showed a slowdown in housing market activity.
Despite this cooling, lenders are responding with increased competition on pricing. Mortgage providers including major high street banks and building societies have been reducing the cost of their fixed-rate deals in anticipation of a base rate decision by the Bank of England expected later in December. These rate reductions have seen some two- and five-year fixed mortgages reach their lowest levels since late 2022, helping to broaden access for borrowers.
According to the most recent industry reviews, mortgage lending activity has returned to growth after a period of relative stagnation, underlining how demand for borrowing continues even in a more cautious market environment. Meanwhile, UK Finance has highlighted ongoing constraints in mortgage access, suggesting that while lenders are broadly supportive of borrowers, not all customers are seeing equal ease of entry.
Making it Easier to Get a Mortgage
Regulatory developments are also in motion. The Financial Conduct Authority (FCA) continues to pursue pro-growth regulatory reforms designed to simplify mortgage processes and support consumer access to finance, while firmly maintaining protections that prevent unfair selling and poor outcomes for borrowers.
How Banks Are Reacting and What It Means for Borrowers
Banks and building societies are naturally responding to two key influences:
- Softer inflation expectations
- Prospects of lower interest rates in 2026
Anticipation of a possible Bank Rate cut later this month has prompted lenders to adjust mortgage pricing ahead of those moves, effectively creating a competitive environment that benefits consumers.
This so-called “mortgage price war” has led to more competitive fixed-rate products, particularly for customers in stronger equity positions. Some lenders are now offering two-year and five-year fixed deals significantly below the levels seen earlier in the year, making change of mortgage and new mortgage decisions an attractive proposition for many.
Romany Yousab, Mortgage Broker in Nottingham said:
“While lower advertised rates are positive news, it remains essential to understand that each product has its own eligibility criteria, fees and terms. Banks will also take into account factors such as loan-to-value (LTV), credit history and personal circumstances before confirming any offer. This is where careful professional mortgage advice can make a real difference.”
Why Getting Professional Mortgage Advice Matters
When interest rates and market conditions shift, mortgage decisions become more complicated than simply choosing the lowest headline rate. Our friendly and regulated mortgage advisers will take the time to understand your full circumstances, including your current mortgage, income, plans for the future and your appetite for risk. This insight allows them to make recommendations that balance savings with long-term financial security.
Our mortgage advisers are regulated by the FCA and must adhere to strict rules designed to protect you, ensuring that any recommendation is suitable for your needs and that all information is fair, clear and not misleading. Borrowers who try to navigate the market alone may unintentionally overlook key details like early repayment charges, product fees or the impact of future rate changes on their monthly payments.
Seeking professional mortgage advice is particularly beneficial when rates are moving and product choices seem to change week-by-week. A mortgage adviser can help you:
- compare available mortgage options from an extensive range of lenders
- explain complex terms in plain language
- support you through the mortgage application process with lenders.
Approaching the End of Your Mortgage Deal: What You Should Do
If your current mortgage deal is coming to an end in the next few weeks or even over the next six months, planning ahead is vital.
The period before the end of a fixed rate or tracker deal can be when you have the most choice and where you can secure more favourable terms.
Look for a New Mortgage Deal Early
The FCA’s Mortgage Charter statistics show that many borrowers already choose a new deal early, up to six months before expiry, which can be a sensible approach to avoid being automatically moved onto a lender’s standard variable rate, which is usually higher than product rates.
How to start looking for a new mortgage:
- Find out exactly when your current mortgage deal ends.
- Check what your lender’s standard variable rate will be if you do nothing.
- Start exploring your options.
- Compare any potential fees, such as early repayment charges or product-switch fees, to understand how they affect the overall cost of moving to a new deal.
- Consider speaking to a regulated mortgage adviser who can help you weigh up the cost of switching against the potential long-term savings, ensuring any decision aligns with your financial goals and personal circumstances.
With the right guidance and a clear understanding of how your current deal stacks up against the wider market, you’ll be better placed to judge the most suitable moment to make a change and secure a mortgage that supports both your life plans and your financial wellbeing.
Looking Ahead
As we head into the new year, the outlook for mortgages remains cautiously optimistic. Falling inflation and the possibility of base rate cuts have encouraged lenders to offer more competitive new mortgage and remortgage deals, creating opportunities for both existing homeowners and those looking to buy for the first time.
However, navigating this evolving landscape with confidence comes down to preparation and professional insight. Planning ahead, especially if your mortgage is nearing the end of its current term, will give you the best chance of securing a deal that aligns with your needs. Taking time now to speak with a regulated mortgage adviser can make this complex process clearer, less stressful and ultimately more rewarding.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Thomas Oliver UK LLP is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.
Sources: https://www.rics.org/news-insights/housing-market-weakens-buyer-demand-softens-prices-retain-downward-pressure, https://moneyweek.com/personal-finance/mortgages/latest-UK-mortgage-rates, https://www.fca.org.uk/data/mortgage-charter-uptake, https://www.ukfinance.org.uk/news-and-insight/press-release/mortgage-activity-strengthened-in-q3-while-fca-review-highlights, https://theintermediary.co.uk/2025/12/mortgage-lending-returns-to-growth-but-affordability-pressures-persist-says-uk-finance/, https://www.whatmortgage.co.uk/home-buying/news-home-buying/mortgage-rates-plummet-to-as-low-as-3-51/
