Is Now a Good Time to Buy? Understanding Interest Rates in Today’s Housing Market

Whether you’re a first-time buyer or looking to move up the property ladder, one of the biggest questions in the market right now is: Is now a good time to buy a home? One of the biggest factors influencing that answer is interest rates and understanding how they work can help you make a smarter decision.

What’s Happening with Interest Rates Right Now

Interest rates in the UK are easing after a series of cuts by the Bank of England (BoE). In December 2025, the BoE lowered the base interest rate from 4% to 3.75%, the lowest level in almost three years, in response to slowing inflation. 

This base rate influences the cost of borrowing for mortgages meaning that when it goes down, lenders can offer lower mortgage interest rates. Some fixed-rate deals and variable rates have already fallen as a result.

Why Lower Rates Matter for Homebuyers

When interest rates fall:

• Mortgage payments generally become more affordable, because lenders pass on lower borrowing costs. 
• Monthly payments may be reduced, especially if you’re on a variable or tracker rate. 
• Borrowers may qualify for larger loans or could afford homes that were previously out of reach.

Lower rates can make buying more appealing, especially if you’ve been waiting for better affordability.

But It’s Not Just About Interest Rates

Interest rates are an important part of the equation, but they aren’t the only thing that determines whether it’s a good time for you to buy:

Housing Market Conditions

In many parts of the UK, house prices are relatively stable some areas are seeing modest growth, others are flat or slightly down. This means buyers may have more room to negotiate. 

Affordability

Even with lower rates, affordability depends on your income, deposit size, and overall financial situation. Banks still use stress tests to make sure your income can cover future rate rises.

Future Rate Expectations

Economists expect interest rates to continue gently drifting lower through 2026, but predicting exact movements is difficult. Markets have already priced in many potential cuts, meaning mortgage rates might not drop dramatically overnight

So, Is It a Good Time to Buy?

For many buyers: Yes lower interest rates improve affordability compared with the recent high-rate environment.
But timing still matters: If you’re planning to buy, it may make sense to get your finances in order now rather than wait indefinitely for “perfect” rates, which are hard to time.
Consider using a mortgage broker: They can help you compare current deals and find the right product for you.

Ultimately, the best time to buy is when you’re financially ready — with a strong deposit, good credit, and a mortgage plan that fits your long-term goals.

Final Thought

Interest rates are trending in your favour, which can make buying more attractive than it was during the peaks of 2022–2024. But personal readiness is just as important as market timing so take time to prepare, explore your options, and talk to a mortgage professional if you’re not sure where to start.

Sources

• Bank of England base rate cut and impact on borrowing costs MoneySavingExpert / BoE decision summary. MoneySavingExpert.com
• Latest market mortgage rate trends and lender pricing. Compare the Market
• How falling interest rates affect borrowing and mortgage costs. MaPS
• Continued predictions for mortgage interest rate direction. moneysupermarket.com
• Regional house price movements and market conditions.