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Savers continue to pay the price of BOE base rate cuts

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
18/09/2025
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Savers continue to pay the price of BOE base rate cuts

The Bank of England Base Rate cut last month has resulted in a cascade of savings rate cuts, with little movement seen in mortgage rates, according to Moneyfactscompare.co.uk analysis.

Savers continue to pay the price of BOE base rate cuts

The Bank of England Base Rate cut last month has resulted in a cascade of savings rate cuts, with little movement seen in mortgage rates, according to Moneyfactscompare.co.uk analysis.

Mortgage market analysis

  • A month on since the Bank of England Base Rate was cut to 4%, there have only been slight falls to average mortgage rates. Month-on-month the average standard variable rate (SVR) has fallen by 0.10%, from 7.42% to 7.32%. A year ago, the rate was 7.99%.
  • Over the past month, the average two- and five-year fixed rates have dropped by 0.05% and 0.01% respectively; a year ago, the rates were 5.56% and 5.20%.
  • Despite the base rate cut last month, the average 10-year fixed rate rose from 5.60% to 5.67%. The rate is now higher than 5.63% in September 2024.
  • The Moneyfacts Average Mortgage Rate fell to 5.00%, down from 5.04% month-on-month. It is down from 5.44% since September 2024, and lower than 6.41% in September 2023. However, the rate is higher than September 2022 at 4.29%.

 

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

“Millions of borrowers are due to come off a cheap fixed rate mortgage in the coming months, so they will be hoping for rates to dip lower. The Moneyfacts Average Mortgage Rate has dropped by 0.44% over the past year, to 5.00%. The rate was last lower back in September 2022 where, later that month, the ‘mini-Budget’ was held. Over the past three years, mortgage rates have been volatile, so recent cuts will please those borrowers looking to secure a new deal.

“However, uncertainties surrounding the outlook for interest rate moves have been evident over recent weeks, with volatile swap rates leading to a more cautious approach from lenders to make any significant changes. Not only this, but many will be waiting with bated breath for the Budget. This waiting game, alongside forecasts for inflation to remain above target, makes it less likely for the Bank of England to make further rate cuts this year. Borrowers would be wise not to wait around to lock into a new deal, as the incentive to switch from a revert rate to a two-fixed deal could save them £363 per month*. A shorter-term fixed mortgage may well be more desirable for now, particularly as longer-term fixed rates are higher. In fact, those looking at a 10-year fixed mortgage will find the average rate is now higher than a year ago, at 5.67%.

“Outside of mortgage rate moves, lenders have been tasked to do more to support new buyers by the Government in a bid to boost UK growth. As a result, several lenders have been relaxing stress tests, which will be good news to first-time buyers - the lifeblood of the mortgage market. However, affordability hurdles remain, and buyers need more drive behind the provision of affordable housing. Those buyers who are only able to borrow at higher loan-to-values run the risk of falling into negative equity if house prices plummet. Therefore, seeking advice before entering any arrangement is wise and it’s worthwhile trying to overpay each month to reduce the overall mortgage term.”

*Average standard variable rate (SVR) is currently 7.32%. Calculations based on a £250,000 mortgage over a 25-year term on a repayment basis. SVR repayment £1,818 per month, versus £1,455 per month on 4.96% two-year fixed rate.

 

Mortgage market analysis

Average mortgage rates

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Standard variable rate (SVR)

4.40%

5.40%

8.09%

7.99%

7.42%

7.32%

Two-year fixed mortgage

2.34%

4.24%

6.70%

5.56%

5.01%

4.96%

Five-year fixed mortgage

2.64%

4.33%

6.19%

5.20%

5.01%

5.00%

10-year fixed mortgage

2.97%

4.33%

5.82%

5.63%

5.60%

5.67%

Average rates shown are as at the first available day of the month, unless stated otherwise.

Source: Moneyfactscompare.co.uk

 

Moneyfacts Average Mortgage Rate

 

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Moneyfacts Average Mortgage Rate

2.49%

4.29%

6.41%

5.44%

5.04%

5.00%

Calculated from the total of all on-sale, core market, fixed and variable tracker mortgages. Standard exclusions apply: Self-build only, shared ownership only, new build only, shared equity only, standard variable rates and adverse credit.
Source: Moneyfacts Average Mortgage Rate.

 

 

Mortgage market analysis

  • A month on since the Bank of England Base Rate was cut to 4%, there have only been slight falls to average mortgage rates. Month-on-month the average standard variable rate (SVR) has fallen by 0.10%, from 7.42% to 7.32%. A year ago, the rate was 7.99%.
  • Over the past month, the average two- and five-year fixed rates have dropped by 0.05% and 0.01% respectively; a year ago, the rates were 5.56% and 5.20%.
  • Despite the base rate cut last month, the average 10-year fixed rate rose from 5.60% to 5.67%. The rate is now higher than 5.63% in September 2024.
  • The Moneyfacts Average Mortgage Rate fell to 5.00%, down from 5.04% month-on-month. It is down from 5.44% since September 2024, and lower than 6.41% in September 2023. However, the rate is higher than September 2022 at 4.29%.

 

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

“Millions of borrowers are due to come off a cheap fixed rate mortgage in the coming months, so they will be hoping for rates to dip lower. The Moneyfacts Average Mortgage Rate has dropped by 0.44% over the past year, to 5.00%. The rate was last lower back in September 2022 where, later that month, the ‘mini-Budget’ was held. Over the past three years, mortgage rates have been volatile, so recent cuts will please those borrowers looking to secure a new deal.

“However, uncertainties surrounding the outlook for interest rate moves have been evident over recent weeks, with volatile swap rates leading to a more cautious approach from lenders to make any significant changes. Not only this, but many will be waiting with bated breath for the Budget. This waiting game, alongside forecasts for inflation to remain above target, makes it less likely for the Bank of England to make further rate cuts this year. Borrowers would be wise not to wait around to lock into a new deal, as the incentive to switch from a revert rate to a two-fixed deal could save them £363 per month*. A shorter-term fixed mortgage may well be more desirable for now, particularly as longer-term fixed rates are higher. In fact, those looking at a 10-year fixed mortgage will find the average rate is now higher than a year ago, at 5.67%.

“Outside of mortgage rate moves, lenders have been tasked to do more to support new buyers by the Government in a bid to boost UK growth. As a result, several lenders have been relaxing stress tests, which will be good news to first-time buyers - the lifeblood of the mortgage market. However, affordability hurdles remain, and buyers need more drive behind the provision of affordable housing. Those buyers who are only able to borrow at higher loan-to-values run the risk of falling into negative equity if house prices plummet. Therefore, seeking advice before entering any arrangement is wise and it’s worthwhile trying to overpay each month to reduce the overall mortgage term.”

*Average standard variable rate (SVR) is currently 7.32%. Calculations based on a £250,000 mortgage over a 25-year term on a repayment basis. SVR repayment £1,818 per month, versus £1,455 per month on 4.96% two-year fixed rate.

 

Mortgage market analysis

Average mortgage rates

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Standard variable rate (SVR)

4.40%

5.40%

8.09%

7.99%

7.42%

7.32%

Two-year fixed mortgage

2.34%

4.24%

6.70%

5.56%

5.01%

4.96%

Five-year fixed mortgage

2.64%

4.33%

6.19%

5.20%

5.01%

5.00%

10-year fixed mortgage

2.97%

4.33%

5.82%

5.63%

5.60%

5.67%

Average rates shown are as at the first available day of the month, unless stated otherwise.

Source: Moneyfactscompare.co.uk

 

Moneyfacts Average Mortgage Rate

 

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Moneyfacts Average Mortgage Rate

2.49%

4.29%

6.41%

5.44%

5.04%

5.00%

Calculated from the total of all on-sale, core market, fixed and variable tracker mortgages. Standard exclusions apply: Self-build only, shared ownership only, new build only, shared equity only, standard variable rates and adverse credit.
Source: Moneyfacts Average Mortgage Rate.

 

 

Savings market analysis

  • Since the start of August 2025, the average easy access savings rate has fallen by 0.08%, from 2.68% to 2.60% and the average easy access ISA rate fell by 0.08% from 2.90% to 2.82%.
  • The average notice rate has fallen by 0.10% from 3.63% to 3.53% since the start of August 2025 and the average rate on a notice ISA has fallen by 0.12% from 3.49% to 3.37%.
  • Year-on-year average rates across easy access and notice accounts have fallen, with the average easy access rate down from 3.08%, and the average easy access ISA rate down from 3.29%. The average notice account has fallen from 4.23% and the average notice ISA rate has fallen from 4.08%.
  • The Moneyfacts Average Savings Rate fell to 3.46%, down from 3.50% month-on-month. It is down from 3.80% since September 2024, and lower than 4.29% in September 2023. The rate was last above 4% in January 2024 (4.04%).

 

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

“Savers pay the price of cuts to the Bank of England Base Rate, and the 0.25% reduction in August has been no exception. Overall, savings rates continue on the downward trend, with the Moneyfacts Average Savings Rate now at 3.46%, down 0.34% year-on-year. The average easy access rate has fallen further below 3%, so savers must act now and switch their variable rate account if it no longer pays a decent return on their hard-earned cash. Those savers frustrated to see their cash eroded by inflation might feel more inclined to secure a fixed rate bond or ISA in the coming months, with many paying a guaranteed return of 4% or more.

“It might be disheartening for savers to find the rate on their account has been cut over the past month, but now is not the time to become apathetic. Those with cash stashed away for convenience with one of the biggest high street banks will find they pay an average of 1.52%** across easy access accounts. Not only this, but only a quarter of savings accounts on the market overall can beat 4%, which shows how loyalty does not pay and why many savers could be losing money in real terms, due to inflation. Now is the time for savers to ditch and switch elsewhere, such as to mutuals or challenger banks that are paying attractive rates.

“Taking advantage of cash ISAs is a popular option for savers, but unfortunately, they have not been left unscathed by rate cuts. However, ISAs will still be sought after by savers looking to protect their pot from tax, regardless of rate cuts. There will be many savers impacted by fiscal drag, and as a result, basic rate taxpayers who edge up into the higher-rate tax bracket at 40% will have their Personal Savings Allowance (PSA) halved from £1,000 to £500. This will just add fuel to the fire for demand in ISAs, yet the future of the cash ISA allowance remains up in the air as rumours continue to circulate for a review in the upcoming Budget.”

**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 September 2025.

 

Savings market analysis

Average savings rates

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Easy access

0.20%

0.85%

2.96%

3.08%

2.68%

2.60%

Notice account

0.54%

1.41%

4.14%

4.23%

3.63%

3.53%

Easy access ISA

0.26%

0.92%

3.04%

3.29%

2.90%

2.82%

Notice ISA

0.37%

1.21%

3.89%

4.08%

3.49%

3.37%

Averages based on £10,000 gross rate. Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

Moneyfacts Average Savings Rate

 

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Moneyfacts Average Savings Rate

0.67%

1.82%

4.29%

3.80%

3.50%

3.46%

Calculated from the total of all on-sale, core market, variable and fixed rate savings accounts and Cash ISAs. Standard exclusions apply: Regular savings, children’s accounts, LISAs and JISAs.
Source: Moneyfacts Average Savings Rate.

 

 

Savings market analysis

  • Since the start of August 2025, the average easy access savings rate has fallen by 0.08%, from 2.68% to 2.60% and the average easy access ISA rate fell by 0.08% from 2.90% to 2.82%.
  • The average notice rate has fallen by 0.10% from 3.63% to 3.53% since the start of August 2025 and the average rate on a notice ISA has fallen by 0.12% from 3.49% to 3.37%.
  • Year-on-year average rates across easy access and notice accounts have fallen, with the average easy access rate down from 3.08%, and the average easy access ISA rate down from 3.29%. The average notice account has fallen from 4.23% and the average notice ISA rate has fallen from 4.08%.
  • The Moneyfacts Average Savings Rate fell to 3.46%, down from 3.50% month-on-month. It is down from 3.80% since September 2024, and lower than 4.29% in September 2023. The rate was last above 4% in January 2024 (4.04%).

 

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

“Savers pay the price of cuts to the Bank of England Base Rate, and the 0.25% reduction in August has been no exception. Overall, savings rates continue on the downward trend, with the Moneyfacts Average Savings Rate now at 3.46%, down 0.34% year-on-year. The average easy access rate has fallen further below 3%, so savers must act now and switch their variable rate account if it no longer pays a decent return on their hard-earned cash. Those savers frustrated to see their cash eroded by inflation might feel more inclined to secure a fixed rate bond or ISA in the coming months, with many paying a guaranteed return of 4% or more.

“It might be disheartening for savers to find the rate on their account has been cut over the past month, but now is not the time to become apathetic. Those with cash stashed away for convenience with one of the biggest high street banks will find they pay an average of 1.52%** across easy access accounts. Not only this, but only a quarter of savings accounts on the market overall can beat 4%, which shows how loyalty does not pay and why many savers could be losing money in real terms, due to inflation. Now is the time for savers to ditch and switch elsewhere, such as to mutuals or challenger banks that are paying attractive rates.

“Taking advantage of cash ISAs is a popular option for savers, but unfortunately, they have not been left unscathed by rate cuts. However, ISAs will still be sought after by savers looking to protect their pot from tax, regardless of rate cuts. There will be many savers impacted by fiscal drag, and as a result, basic rate taxpayers who edge up into the higher-rate tax bracket at 40% will have their Personal Savings Allowance (PSA) halved from £1,000 to £500. This will just add fuel to the fire for demand in ISAs, yet the future of the cash ISA allowance remains up in the air as rumours continue to circulate for a review in the upcoming Budget.”

**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 September 2025.

 

Savings market analysis

Average savings rates

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Easy access

0.20%

0.85%

2.96%

3.08%

2.68%

2.60%

Notice account

0.54%

1.41%

4.14%

4.23%

3.63%

3.53%

Easy access ISA

0.26%

0.92%

3.04%

3.29%

2.90%

2.82%

Notice ISA

0.37%

1.21%

3.89%

4.08%

3.49%

3.37%

Averages based on £10,000 gross rate. Average rates shown are as at the first available day of the month, unless stated otherwise. Source: Moneyfactscompare.co.uk

 

Moneyfacts Average Savings Rate

 

Dec-21

Sep-22

Sep-23

Sep-24

Aug-25

Sep-25

Moneyfacts Average Savings Rate

0.67%

1.82%

4.29%

3.80%

3.50%

3.46%

Calculated from the total of all on-sale, core market, variable and fixed rate savings accounts and Cash ISAs. Standard exclusions apply: Regular savings, children’s accounts, LISAs and JISAs.
Source: Moneyfacts Average Savings Rate.

 

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

You are welcome to use part or all of this press release, so long as we are sufficiently sourced. We would appreciate a link back to Moneyfactscompare.co.uk.

Pioneering financial comparison technology for over 35 years, Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Contact Us If you're looking for extra comment, a chart or more information, then please give us a call. We are always more than happy to help.
Adam French Head of News & Communications
01603 476154
Email Adam
Rachel Springall Press Officer / Finance Expert
01603 476210
Email Rachel
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01603 476169
Email Caitlyn
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©2025 Moneyfacts Group plc. All Rights Reserved. Use of this Website constitutes acceptance of the Company’s General Terms of Use & Privacy Policy. Moneyfacts Group plc is registered in England and Wales, company no. 4063110. Registered office: Moneyfacts House, 66-70 Thorpe Road, Norwich, NR1 1BJ. Moneyfacts, MONEY £ ACTS and INTEREST are Registered Trademarks.