Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Borrowers will be hoping rates continue on the downward trend in the coming months, particularly the millions of consumers due to come off a low rate fixed deal this year. The motivation to secure a new deal is prevalent, as lenders have been busy repricing deals both due to last month’s Bank of England Base Rate cut and swap rate volatility. However, sticky inflation and current global pressures can result in a more cautious approach to rate setting, and such uncertainty can impact swap rates. These developments could spell disappointment for borrowers, but it is worth noting that the market is in a much better shape than seen over previous years, and lenders have been reviewing their stress testing in response to the Government’s plans to boost UK growth. Mortgage prisoners who have not been able to borrow more could now break free of their costly variable rate mortgage and secure a lower fixed rate deal. Indeed, a typical mortgage borrower being charged the current average Standard Variable Rate (SVR) of 7.48% would be paying £365 more per month, compared to a typical two-year fixed rate*.

“First-time buyers remain a crucial part of the mortgage market, as without them, the housing market could stagnate. It is imperative that lenders work hard to support these buyers, to keep the market moving. However, buyers may well be struggling with the cost of living and have no parental assistance nor a significant sum stashed away to put a deposit down to get a mortgage. Thankfully, lenders have been improving their ranges of deals at higher loan-to-values, and the relaxation of stress tests could now enable first-time buyers to get their first foot on the property ladder. New buyers need to seek advice in the first instance to understand the consequences of falling into negative equity if house prices plummet, as this is more of a risk for those borrowing at the highest ends of the loan-to-value spectrum.”

*Average standard variable rate (SVR) is currently 7.48%. Calculations based on a £250,000 mortgage over a 25-year term on a repayment basis. SVR repayment £1,844 per month, versus £1,479 per month on 5.12% two-year fixed rate.

Savings market analysis

• Average rates across easy access and notice accounts have fallen since the start of June 2024. The average easy access rate has fallen from 3.12%, the average easy access ISA rate has fallen from 3.31%. The average notice account has fallen from 4.26% and the average notice ISA rate has fallen from 4.14%.
• Since the start of May 2025, the average easy access savings rate has fallen from 2.79% to 2.72% and the average easy access ISA rate fell from 3.03% to 2.98%.
• The average notice rate has fallen from 3.78% to 3.68% since the start of May 2025 and the average rate on a notice ISA has fallen from 3.71% to 3.55%.
• The Moneyfacts Average Savings Rate fell to 3.52%, down from 3.59% month-on-month. It is down from 3.89% since June 2024, but higher than 3.38% in June 2023.

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, said:

“Savers will be disappointed to see variable savings rates fall across the board over the past month, showing how essential it is to find out if their savings pots are working as hard as they should be. Loyalty does not pay so it comes down to savers to proactively review rates and switch their account if they are getting a poor return on their hard-earned cash. The cuts to the Bank of England Base Rate spell misery for savers, as banks are quick to slash rates in response and cuts can create an apathetic attitude among aspiring savers as a result. Those who rely on their savings interest to supplement their income are already struggling with the cost of living so rate cuts are a real blow. It is vital that savers look beyond the high street banks and instead take notice of the many challenger banks and mutuals competing in the savings arena. The biggest high street banks pay an average of 1.56%** across easy access accounts, but even this pitiful return is being eaten away by inflation, which sits above its 2% target. It may be convenient to leave pots with such prominent brands, but it’s costing savings in better returns available elsewhere. Even the average easy access rate pays more, at 2.72%, which shows how fundamental it is for savers to act now to make their money work harder.

“Those savers looking to protect their money from tax would do well to take advantage of their new ISA allowance if they have yet to do so. Shopping around is crucial at a time when more brands have taken residence in the cash ISA market, and the most attractive returns are on the shelf from challenger banks. However, it is down to savers to ensure they understand any specific caveats for any cash ISA, particularly as some of the best rates include short-term bonuses or may only be available via a mobile app. This will exclude those savers who prefer a more traditional banking method, but they must compare rates against their accessibility preferences. Savings providers need to offer an array of deals to cater for different generations of savers who have varying needs. Cash ISAs will be a tax-free sanctuary for millions of savers who are expected to pay higher-rate tax at 40% this tax-year, seeing their Personal Savings Allowance (PSA) being halved from £1,000 to £500 as a result.”

**High street banks include Bank of Scotland, Barclays Bank, Halifax, HSBC, Lloyds Bank, NatWest, Royal Bank of Scotland and Santander. Averages collected from gross interest rates paid across all live easy access accounts with these brands based on a £10,000 deposit, latest rates as at 16 June 2025.