Trump’s Tariffs Influence on UK Mortgage Rates

It goes without saying, Donald Trump’s trade tariff announcements have the potential to influence money matters in the UK. The full effects aren’t yet known, but the tariffs are already prompting mortgage lenders to re-examine their rates and consider future changes. 

As reported by the BBC, 1.3 million homeowners’ fixed rate mortgage deals are set to end in the next 8 months. Those planning to take out a mortgage or tie into a new fixed rate deal may benefit from mortgage rate cuts in the coming months – though in 2025’s already fluid financial landscape, the picture could quickly change. 

Bank of England rates stood at 5.25% until August 2024, the highest they have been since the 2010s. This in turn led to high interest rates for borrowers. Average mortgage rates have tended to remain above 5% since Liz Truss’s mini-budget in September 2022, at times approaching 7%. 

Following cuts in August and November 2024, interest rates now stand at 4.5%. The Bank of England made the decision to hold them in March. However, experts are anticipating that they may cut interest rates three times throughout 2025 in a bid to promote economic growth. In anticipation, many mortgage lenders already cut interest rates on select fixed rate mortgages this year. 

In the week following the tariff announcement, mortgage lenders including Clydesdale Bank, TSB Bank, Metro Bank and Co-operative Bank cut interest rates on certain mortgage deals. Notably, these new deals may not be available to every borrower, or indeed, suitable for them. Their status as a first-time buyer or an existing homeowner, and crucially, the size of the deposit, may limit access. The fees attached can also vary. 

Take nothing for granted, as this is a turbulent time and rates can change, not to mention the economy may see increased pressure. As with any major financial decision, it’s crucial that you speak to an experienced advisor. 

Read more about the mortgage rate cuts on This Is Money and BBC.