Families securing cheaper mortgages across the country, as costs fall by almost £1,400 since the election - Labour

Families are almost £1,400 better off when taking out a typical mortgage since Labour came to office, new analysis has found.

The average cost for a new two-year fixed mortgage across England and Wales was £1,185 per month in June 2024.

However, following the Labour Government's action to restore stability to the economy – with six interest rate cuts since the General Election, the fastest pace of cuts in 17 years – the cost of a typical new mortgage has fallen to £1,071 per month.

This means that families taking out a new mortgage are saving around £114 each month, or £1,368 a year – putting money back in people's pockets.

These savings have been felt by households in every corner of the country.

For example, a typical mortgage of an average house in Hendon cost £3,210 a year less in December 2025 compared with an identical mortgage in June 2024.

The equivalent annual saving in Birmingham Edgbaston was £1,660 and was £1,800 in Cardiff West.

Following the disastrous Liz Truss mini-budget, two-year fixed mortgage rates shot up to over six per cent in October 2022. That piled misery onto families, adding hundreds of pounds onto their monthly bills when buying a home or remortgaging in the period that followed.

Chancellor Rachel Reeves' management of the economy since the General Election has meant that interest rates on typical mortgages fell from 5.16% in June 2024 to 3.97% in December 2025.

That stands in stark contrast to the Tories' catastrophic record which saw the economy crashed and family finances fleeced.

Nigel Farage's Reform have promised to go further than the Tories' disastrous policies, splurging billions on unfunded pledges, which risks interest rates rising again, and putting up every mortgage in the country.

The news on mortgages comes alongside a wider package of measures introduced by the Labour government that will give security to and protect the pockets of working people in their living arrangements.

As mortgage holders benefit from reduced costs, the Renters' Rights Act – coming into force on 1 May 2026 – will see ‘no fault' evictions banned, and it will become illegal for landlords and letting agents to:

• Increase rent prices more than once a year
• Ask for more than one month's rent payment in advance
• Pit prospective tenants against one another through rental bidding wars
• Discriminate against potential tenants, because they receive benefits or have children.

James Murray MP, Labour's Chief Secretary to the Treasury, said:

“The Tories dealt a hammer blow to family finances when they crashed the economy and sent mortgages, rents and bills soaring.

“Labour is bringing the cost of living down. We've stabilised the economy, leading to six interest rate cuts and lower mortgage costs.

“We're also cutting £150 off average energy bills, freezing rail fares, freezing prescription fees, raising the minimum wage and lifting over half a million children out of poverty. This is the year when working people across Britain will start to feel the benefit of the change Labour is delivering.”

Ends 

Notes:

• The average cost of a mortgage has been calculated as follows:

• All house price figures refer to England and Wales.

• Average house price figures in the ‘December 2025' column refer to average house prices in the 12 months to March 2025, as this is the most recent period for which data is available. Average house price figures in June 2024 refer to average prices in the 12 months to June 2024.

• The difference between the monthly payment cost in June 2024 and in December 2025 is £114.01, which amounts to a saving of £1,368.17 per year.

• Constituency-level median house price data, used to calculate changes in mortgage costs, is from the House of Commons Library.

• In October 2022, following the Liz Truss mini-budget, two-year fixed mortgage rates (for 85% loan-to-value mortgages) reached 6.17%.