Autumn Budget 2025: Income Tax Plans Scrapped! What Now for Mortgage Rates?

For weeks now, the Autumn Budget 2025 on 26 November has dominated the headlines, creating uncertainty and anxiety for many.

In just a few days the government has gone from signalling a possible 2p rise in income tax to a dramatic U-turn, with Sir Keir Starmer and Rachel Reeves now ditching plans to raise income tax rates after a backlash from MPs and voters.

At the same time, the Bank of England base rate is sitting at 4% after a knife-edge vote to hold in November, with markets now pricing in a decent chance of a rate cut in December and a gradual downward path for interest rates into 2026.

In the middle of this:

Some UK mortgage lenders are cutting fixed rate mortgage prices already, HSBC and Halifax being two, kicking off what some commentators such as HomeOwners Alliance, are calling a “mortgage price war”. Meanwhile, some other mortgage lenders have nudged rates back up in recent weeks as they wait for clearer signals on the base rate and the Budget.

No wonder lots of The Mortgage Broker customers are asking:

• How will the Autumn Budget 2025 affect my mortgage?
• Should I remortgage before or after the Budget?
• What does Autumn Budget 2025 mean for first-time buyers and buy-to-let landlords?
• Is now the right time to lock into a fixed mortgage rate?

This guide is simply designed to answer those questions and to show you how a mortgage broker can give you stability when finance and politics feels like a luck of the draw casino.

Important: This article is general information, not personal mortgage advice or tax advice. Always speak to a regulated adviser about your own situation and a qualified tax professional about tax.

1. What’s actually changed so far?

The scrapped income tax rise

The big political story so far is simple:

The government has scrapped plans to raise income tax rates in this Budget, after weeks of “pitch-rolling” a manifesto-breaking move. Instead, they are expected by some to lean on certain “stealth taxes” like freezing income tax thresholds and a series of narrower tax-raising measures to plug an estimated budget gap of around £30–40bn (according to Sky News).

How does this affect mortgages? 

Well indirectly…

• Higher or lower taxes simply change how much disposable income people have.
• That in turn feeds into affordability and overall demand in the housing market.

Markets also look at whether the Budget is inflationary or deflationary, which affects expectations for future interest rates… But there is no direct link where one Budget line automatically changes your mortgage rate overnight.

Bit more info on this: Behind the scenes, lenders also watch something called “swap rates”, which is essentially the wholesale cost of fixing money for 2, 5 or 10 years. When investors think inflation will be higher for longer, those swap rates usually rise and fixed mortgage rates tend to follow. When investors think inflation is coming under control, swap rates can fall and lenders have more room to cut fixed rates.

The Autumn Budget does not flick a switch on your mortgage overnight, but it helps shape the path of interest rates and fixed rate deals over the next few months and years.

2. Autumn Budget 2025 and the mortgage market backdrop

2.1 Where are mortgage rates now?

The Bank of England base rate is 4%, held in November in a narrow 5–4 vote whilst inflation is still above target at around 3.8%, but heading in the right direction. It appears markets are pricing in at least one rate cut over the next few months, depending how the Budget lands and how quickly inflation falls.

On the mortgage side:

Recent weeks have seen mixed moves from lenders. Earlier in the autumn some big names including HSBC, Barclays, Nationwide and Halifax raised selected rates as they waited for clearer signals. Then as mentioned, more recently, we have seen cuts to some fixed-rate deals and talk of this “mortgage price war”, with average two-year fixed rates drifting down towards the mid-4s for borrowers with strong deposits. There isn’t one single direction of travel. The message from lenders is: watch the data, move cautiously, stay competitive.

Mortgage Rates since January 2023. Average 50year and 2-year fixed rates. Source: Yahoo Finance. 

2.2 What we are seeing from mortgage lenders ahead of the Budget

Based on recent lender moves and independent mortgage forecasts:

Whilst not instant, pricing is very sensitive to swap rates (the rates banks pay to borrow money for 2, 5 or 10 years). A small move in swaps can trigger a flurry of repricing.

Many lenders are actively competing for quality borrowers, especially for:

• Remortgages where people have decent equity
• 5-year fixed rates, which give lenders funding certainty
• There is a steady flow of 90% and 95% LTV products for first-time buyers, but these are priced higher and criteria can be tighter.
• In buy-to-let, lenders remain more cautious, with stress tests still biting, especially when rental yields are thin.

Crucially, most lenders are not sitting on their hands just because the Budget is approaching. They keep tweaking products based on funding costs and competition and there are some nice common sense products coming in to play for borrowers.

3. How could the Autumn Budget 2025 affect mortgages?

3.1 How could the Autumn Budget 2025 impact mortgage rates in the UK?

The Autumn Budget 2025 will help shape the path of mortgage rates over the next few months and years, but it is unlikely to change your mortgage overnight.

It can influence mortgage rates through changes in the base interest rate and alterations in government policy. Any fluctuations in inflation or decisions regarding fiscal policy could lead to adjustments in mortgage rates. Any mortgage customer should stay informed about these changes and consult with mortgage brokers for the latest advice.

Fixed Rate coming to an end and unsure what to do?

Book a Free Remortgage Review. 

3.2 Will the Autumn Budget 2025 affect first time buyer schemes?

There is constant speculation around the below, but as a first time buyer, you should be focusing on your circumstances and finances, not waiting for wholesale changes in the mortgage market. Waiting can cost more and mortgages can take weeks. Getting mortgage ready today is key, and if rates change before you complete on a mortgage, you can potential switch your rate anyway.

• First-time buyer stamp duty thresholds
• Possible tweaks to government-backed mortgage schemes or guarantees
• Changes to ISAs and the way deposit saving is incentivised

However, none of this is yet confirmed. So if you are a first time buyer, the key practical questions remain.

• What can you afford safely each month?
• How strong is your deposit and credit file?
• Is your job/income stable enough for a two, three or five-year fixed deal?

A mortgage broker can help you build a first time buyer plan that doesn’t depend on speculation and changes, but can be tweaked if a new scheme appears.

3.3 How might Autumn Budget 2025 affect buy-to-let landlords?

Landlords are watching several Budget rumours closely, including:

• Possible National Insurance on rental income
• Further changes to capital gains tax on second homes or investment properties
• A wider overhaul of property taxes, including the idea of replacing stamp duty and council tax with a single annual property levy on higher value homes

Add in existing changes to mortgage interest relief and tougher affordability rules, and it’s no surprise many landlords are:

• Stress testing their portfolios
• Considering incorporation, disposals or switching to lower LTV borrowing
• Looking for more tax-efficient financing

This is where tax advice and specialist buy-to-let mortgage advice need to work together. The Budget could make the numbers tighter, but the fundamental questions remain the same: Is each property still cash-flow positive and worth the risk?

4. Should you fix your mortgage before or after the Autumn Budget 2025?

We are getting this same question all the time: “Should I lock in a fixed mortgage rate amid Autumn Budget 2025 uncertainty?”

Forums such as Money Saving Expert, are seeing lots of conversations around this subject, as I suspect all mortgage advisers are facing in the UK Market.

What should I do?

• 2, 3 or 5-year fixed?
• Fix now or wait to see if rates drop?
• Consolidate debt within the mortgage or keep things separate?

Here is a practical way to think about it:

4.1 If your fixed-rate mortgage ends in the next 1–7 months

It is common practice to secure a new deal now, up to around six months before your current fixed rate ends (sometimes more, depending on the lender). All mortgage advisers will tell you this is best practice. Going to your current mortgage lender limits you to their products, whereas a mortgage broker can access the market. For example, The Mortgage Broker can search 130 Lenders and over 25,000+ Mortgage Rates.

The rate you secure today can act as a “worst-case” ceiling. 

• If rates rise after the Budget, you’re protected from any rise.
• If rates fall, a mortgage broker can change you to a cheaper product if applicable to your circumstances, or ask the lender to switch you before completion.

You are not betting everything on 26 November. You are putting a sensible Plan A in place now, with room for Plan B if the numbers improve.

4.2 If you’re thinking of waiting “just to see what happens”

According to Mortgage Solutions: Polls suggest around 60% of brokers say their clients are putting off decisions because of Budget uncertainty.

The risk of waiting is:

• You slide onto your lender’s standard variable rate (SVR), which is often much higher than any fixed rate on the market.
• You have less time to get documents together, especially if lenders tighten criteria after the Budget.
• You’re reacting to headlines, not making your own proper financial plan.

In many cases, the smarter move is:

• Explore your remortgage options today.
• Secure something that works as a safety net.
• Ask your broker to review again once the Budget dust has settled.

5. Autumn Budget 2025: why using a mortgage broker matters more than ever

We conducted some research across Reddit and Money Saving Expert forums, which shows there are some consistent themes.

• People are confused by conflicting lender quotes and fee structures.
• They’re unsure how credit history, appraisals/valuations, and existing debts will be treated.
• They don’t know whether to trust bank advice, generic online tools or social media.

Against this backdrop, a good mortgage broker is not a luxury, it is sensible risk management, giving you peace of mind and ensuring that you are taking all market options into consideration. Get free, no obligation advice and understand your mortgage position with clarity.

5.1 What a mortgage broker actually does in a Budget year

At The Mortgage Broker, we can analyse how the Autumn Budget 2025 and Bank of England moves might affect your mortgage. However, a mortgage broker cannot influence any market movements of course, and we don’t have a crystal ball. The facts are though, that there are mortgage products that will be more suitable to your requirements than others.

We will search and analyse the most suitable and sustainable products for your needs and can help with:

• Complex income
• Adverse credit
• Debt consolidation
• Buy-to-let and portfolio landlords

and we will run through various scenarios with you, including the following scenario questions:

• What if rates fall faster than expected?
• What if the Budget tightens affordability or taxes?
• What if your income drops or you need to move?

We will explain the true cost of the deal, including fees, early repayment charges and any overpayment allowances.

In other words, you can get consistency in a very inconsistent environment.

5.2 Pros and cons of using a mortgage broker during uncertain economic times

Pros

• Access to a wide range of lenders, including broker-only ranges
• Expertise in reading lender criteria, especially when affordability rules and risk appetite are shifting
• Remove any paperwork and prepare for underwriting queries, valuations and complex property issues
• Provide a single point of contact when lenders reprice or withdraw products ahead of the Budget or a rate decision

Cons

• Some brokers charge fees of course: The Mortgage Broker offer a no mortgage no fee guarantee.
• Not all brokers have the same panel or service standards
• You still need to do some thinking about your own risk tolerance and long-term plans

The key is transparency: ask how wide their lender panel is, how fees work, and how they’ll support you after the Budget if there are significant changes that may affect your particular mortgage.

6. Practical next steps prior to the Autumn Budget 2025 if you are remortgaging

• Check your current deal end date and your lender’s SVR.
• Pull your credit file and tidy up any issues.

And speak to a broker about Autumn Budget 2025 remortgage options:

• 2, 3 and 5 year fixed
• Product transfers vs full remortgage
• Debt consolidation considerations
• Lock in a rate that works as your worst-case scenario.
• Ask for a post-Budget review so you can switch to anything better that appears, where your lender allows this.

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Or Book a Free Remortgage Appointment

If you’re a landlord

Review each property’s cashflow under:

• Current rates
• Potential higher taxes on rental income
• Possible changes to CGT or property levies
• Talk to a tax adviser and a specialist buy-to-let broker together.

Decide whether to:

• Hold, refinance or de-leverage
• Restructure ownership
• Dispose of underperforming assets

You can request a free, no-obligation mortgage review with a qualified adviser now.

No mortgage offer, no broker fee.