How far will interest rates fall?

Important information - the value of investments and the income from them can go down as well as up, so you may get back less than you invest.

Will mortgage rates fall?

As a general rule, if the Bank of England lowers interest rates then mortgage rates tend to fall as well. Ultimately, however, it is up to lenders to decide the rates they offer and changes to mortgage deals can often run ahead or behind changes in the Bank rate.

Mortgage rates have fallen from a peak in 2023. Rate cuts accelerated in April as financial markets moved their expectations for rates this year lower but have been rising again recently. As of 18 November 2025, the best rate on a five-year fixed rate mortgage was 3.82%¹.

Will cash savings rates fall?

The rates you see on cash savings are set by account providers who compete with each other to win savers’ deposits. While not directly linked to movements in the Bank of England rate, they do tend to correlate with it. The predicted falls in the Bank Rate are, therefore, likely to be accompanied by falling savings rates as well. 

The rates on best-buy cash accounts have been declining since last summer. This has pushed headline rates lower but has also encouraged savings providers to add in conditions which potentially reduce the rate you get. Many of the highest-paying accounts include an element of interest which is temporary and will fall out after six months or a year. Alternatively, you may lose several months interest if you withdraw money from the account. 

Currently, the highest interest is being paid on Cash ISA accounts. As of 18 November 2025, the best rate on a Cash ISA which allows easy access to your money and doesn’t include temporary bonus rates is 4.56%².  
 

Cash options - the best ways to save

There are a number of potential homes for money if you decide to hold it in cash.

It makes sense to shield your cash returns from tax if you can, which means using part of your £20,000 annual ISA allowance to hold cash. Cash ISAs do this job - although any allowance you use for cash cannot then be used for investments.

Non-ISA cash accounts also exist but returns are potentially subject to tax at your rate of income tax, subject to certain allowances.

For this reason, some savers choose Premium Bonds, where there is no guaranteed rate of interest but monthly prizes are paid instead. Prizes are tax free but the rates of return on Premium Bonds have also been falling. Moreover, you have to have above average luck in order to get those rates.

• Read: Is it still worth putting money in Premium Bonds?

An increasingly popular cash option is to move cash savings to an investment account but utilise assets which produce a cash-like return while rates remain somewhat attractive. That would allow you to take advantage of above-inflation return from cash while it lasts, but also leave you ready to switch to investments if and when that suits you.

Cash funds or money market funds held inside investment accounts can do this job. The Fidelity Cash Fund is the best-selling cash fund on the Fidelity Investing platform and is forecast to produce 4.46% of income in the coming year - or 4.11% after deducting the Fidelity platform charge of 0.35%. Please note this yield could go down or up and is not guaranteed.

• Read more about the Fidelity Cash Fund

Fidelity: current interest rates we pay on cash 

Here are the current interest rates we pay on cash held in our accounts. This includes our - 

• Stocks and Shares ISA (including Junior ISA)
• Investment Account
• Cash Management Account
• Self-Invested Personal Pension (SIPP) (including Junior SIPP)

Please note that interest rates can be changed at any time and the rates below have been applied since 1 November 2025. 

• Read more about how and where we hold your cash

Source:

¹ London & Country, 18 November 2025

² MoneySavingsExpert 18 November 2025