Using Bank of England data for 2-year fixed rate mortgages at 75% LTV, we've analyzed how monthly repayments on a £250,000 mortgage (30-year term) have changed from 2023 through 2025.
Three years of mortgage payment changes
2023: The spike year
2023 saw dramatic rate increases as the Bank of England battled inflation. Monthly payments peaked in July 2023 at £1,614 (6.22% interest rate), making it the most expensive time to secure a mortgage in recent years.
2023 Highlights
- Peak: July at £1,614/month (6.22%)
- Average: £1,505/month
- Annual cost at peak: £19,368
2024: Gradual improvement
Rates began to stabilize and decline throughout 2024, though they remained elevated compared to pre-2022 levels. By year-end, monthly payments had fallen to around £1,295 (4.60% in December 2024).
2024 Highlights
- Best rate: October at £1,255 (4.40%)
- Worst rate: May at £1,346 (5.19%)
- Average: £1,298/month
- Improvement from 2023: £207/month average saving
2025: Continued decline
The downward trend has continued in 2025, with rates settling into the low 4% range. The best rate so far was 4.13% in August (£1,218/month), representing significant relief compared to 2023's peak.
2025 Highlights (through October)
- Best rate: August at £1,218 (4.13%)
- Worst rate: February at £1,291 (4.69%)
- Average: £1,249/month
- Saving vs 2023 peak: £396/month (£4,752/year)
The bigger picture
Three-Year Comparison
- 2023 peak: £1,614/month (July) at 6.22%
- 2025 low: £1,218/month (August) at 4.13%
- Total saving: £396/month or £4,752/year
- Over 2 years: £9,504 saved on mortgage payments
- Over 5 years: £23,760 saved on mortgage payments
What this means for homeowners
The journey from 2023's peak to 2025's relative stability demonstrates the massive impact interest rates have on housing affordability. Someone who secured a fixed rate at the July 2023 peak (6.22%) is paying nearly £400 more per month than someone fixing at August 2025's rate (4.13%).
For homeowners coming off fixed rates from 2023-2024, the good news is that remortgaging now could deliver substantial monthly savings. However, those still locked into high fixed rates from 2023 face another 12-24 months of elevated payments.
Looking ahead
With the Bank of England continuing to adjust policy rates based on inflation data, mortgage rates are expected to remain responsive to economic conditions. Homeowners approaching the end of their fixed-rate term should monitor rates closely and consider securing a new deal 3-6 months in advance.
Calculate your own mortgage: Use our Mortgage Calculator to work out monthly repayments based on current rates, or check our Mortgage Affordability Calculator to see how much you could borrow.