Will mortgage rates go down in 2025?

Will Mortgage Rates Go Down in 2025?

Maybe not. The outlook for 2025 suggests mortgage rates will likely stay steady, hovering around 4% to 5%. While that’s higher than the rock-bottom rates investors enjoyed a few years ago, it’s within the range of what many seasoned landlords would consider manageable—especially with strong rental demand continuing in many areas.

But here’s where it gets interesting: some lenders have relaxed their affordability assessments—and that’s having a significant impact on buy-to-let borrowing potential.

📈 What This Means for Property Investors:

Traditionally, BTL mortgages have been tightly controlled by affordability stress tests, often requiring rental income to cover 125% of the mortgage payments at a notional interest rate (typically 5.5%+). But now:

Lenders are easing those stress tests.

As a result, some investors can borrow up to 20% more than before.

This can enable larger acquisitions, better locations, or even portfolio expansion.

📈 Example: Unlocking More Potential with a Higher Mortgage Cap

Imagine you're currently capped at a £200,000 mortgage for a rental property.

Now, let’s say that cap increases by 20% — pushing your borrowing power up to £240,000.

That extra £40,000 could make a big difference in what you can access:

✅ What You Could Now Afford:

Properties in Higher-Growth Areas

Gain exposure to locations with stronger economic and population trends.

Better Quality Stock

Reduce maintenance headaches with newer, well-built homes that require less ongoing work.

Greater Capital Growth & Tenant Demand

Unlock opportunities for higher long-term value and more reliable rental income.

Is This a Game Changer for You?

If you’ve been held back by tight affordability checks—even with solid rental projections—this shift could unlock new investment options.