The average cost of borrowing for a home in the UK has crept higher this week, adding immediate pressure to household budgets for prospective buyers. According to the latest Primary Mortgage Market Survey from Freddie Mac, the average rate on a 30-year fixed-rate mortgage rose from 6.24% to 6.26%. Meanwhile, the average for a 15-year fixed-rate loan increased from 5.49% to 5.54%.
The Real Cost of a Tiny Rate Increase
While a movement of 0.02 percentage points may seem negligible, it can have a profound financial impact over the lifetime of a mortgage. This is especially true for the popular 30-year fixed-rate product. Freddie Mac noted on Thursday that "mortgage rates have been shifting within a narrow ten-basis point range over the last month," adding that this relative stability is a positive sign for market certainty.
To illustrate the concrete effect, consider the median home price from the second quarter of 2025, which stood at $410,800 according to the Federal Reserve Bank of St. Louis. Assuming a buyer puts down a 3.5% deposit, the difference between a rate of 6.24% and 6.26% is stark:
- Monthly Payment: Increases from $2,357 to $2,779 – a rise of $422.
- Total Interest Paid: Soars by $84,160 over the full 30-year term, from $399,048 to $483,208.
This demonstrates how even a minor hike can translate into hundreds more each month and tens of thousands in additional interest.
Expert Outlook: Will Rates Fall Before Year-End?
Many potential homeowners are anxiously watching for signs of relief, with speculation that the Federal Reserve could cut its key rate in December. Such a move often indirectly pulls mortgage rates lower. However, industry veterans urge caution against banking on a significant drop.
Steve Hill, a broker associate at SBC Lending with over two decades of experience, told The Independent he expects rates to remain largely flat through the end of the year. He addressed the optimism of buyers waiting for a December dip, stating, "I know buyers are waiting for rates to be 0.25 [percentage points] lower in December…but with the last few Fed meetings, rates have increased after the announcement."
Is Now Still a Good Time to Buy?
Despite the recent uptick, Hill strongly advocates for moving forward with a purchase now rather than waiting indefinitely. He points out that rates have already fallen considerably from their peak earlier in the year. "In January rates were 7.25%, and today, they're a full point lower," he says, adding that by shopping around, borrowers can currently secure rates around 5.875%.
His message to hesitant buyers is unequivocal: "One hundred percent — that’s the message I try to convey to homebuyers." The advice suggests that while timing the market perfectly is difficult, current conditions compared to recent history may still present a viable opportunity for those ready to commit.
