If you’re thinking about buying a property in Scotland this year, one of the biggest steps on the journey is securing the right mortgage. And let’s be honest, while house hunting is exciting, the world of mortgages can feel like a maze of jargon, percentages and paperwork. But don’t worry, we’ve done the legwork for you.
With interest rates, new mortgage products, and support schemes changing the landscape, it’s worth getting clued up on what’s happening in 2025. Whether you’re a first-time buyer, moving up the ladder or considering a remortgage, here’s your essential guide to what’s going on in Scotland’s mortgage market right now.
What’s the Mortgage Market Looking Like in Scotland This Year?
Scotland’s property market has stayed remarkably resilient, even with a few bumps along the road. After a turbulent couple of years with interest rates on the rise, things have thankfully settled a little. As of May 2025, the Bank of England’s base rate stands at 4.25% — higher than the rock-bottom rates seen during the pandemic, but offering some welcome stability after months of uncertainty.
Fixed-rate mortgages remain the go-to choice for most Scottish buyers, with the security of predictable monthly payments proving a comfort in unpredictable times. That said, tracker and variable-rate options are also attracting interest again, particularly with experts quietly predicting the possibility of a small rate drop towards the end of the year.
If you’re buying in Scotland, it’s worth remembering that our process is slightly different from that in England and Wales. Properties are usually marketed at ‘offers over’ or ‘fixed price’, and once an offer is accepted, it becomes legally binding when both parties sign a contract known as the missives. Having your mortgage sorted early is crucial here — things move quickly once missives are concluded.
The Types of Mortgages You’ll Find in 2025
There’s no such thing as a one-size-fits-all mortgage, and thankfully, there are plenty of options to suit different budgets, lifestyles and priorities this year. Here’s a quick run-through of what’s out there:
- Fixed-Rate Mortgages: Still the most popular choice in Scotland, offering a set interest rate for two, three, five, or even ten years. So far in 2025, a five-year fix typically ranges between 4.85% and 5.45%, depending on your deposit amount.
- Variable-Rate Mortgages: Linked to your lender’s Standard Variable Rate (SVR), which can go up or down at any time. They offer more flexibility but can be pricier if rates rise.
- Tracker Mortgages: These follow the Bank of England base rate, plus a set percentage. Tracker deals have made a bit of a comeback, with rates hovering around +0.75% to +1.25% above base rate.
- Guarantor Mortgages: Ideal for those with a smaller deposit or lower income, where a family member offers savings or their own home as security.
- Green Mortgages: Increasingly popular, these reward buyers purchasing energy-efficient homes with better rates or cash back perks. You’ll usually need an EPC rating of B or above to qualify.
How Much Do You Need for a Deposit in Scotland?
The good news? You don’t necessarily need a huge deposit to get on the property ladder. Most lenders in Scotland offer mortgages with as little as 5% deposit, though the bigger your deposit, the better your choice of interest rates.
There’s also a range of government-backed support schemes designed to help buyers, especially first-timers:
- First Home Fund: Reintroduced in 2024 after a brief pause, this offers up to £25,000 towards your first property via an equity loan.
- LIFT (Low-Cost Initiative for First-Time Buyers): Still going strong in 2025, this scheme helps priority groups, including social tenants and disabled buyers, purchase a home through a shared equity agreement.
What About Remortgaging?
If your fixed-rate mortgage is coming to an end, or you’re currently on your lender’s Standard Variable Rate, 2025 could be a good time to remortgage. Rates have steadied, and many lenders are keen to attract new customers with fee-free legal packages and cashback incentives.
Homeowners in Scotland are remortgaging for various reasons this year — from locking in a better deal to releasing funds for home improvements or switching to a green mortgage after making energy upgrades.
A word of advice: start shopping around a good six months before your current deal expires. That’ll give you time to compare rates and avoid rolling onto a more expensive SVR.
What’s Happening with Buy-to-Let Mortgages?
If you’re thinking of joining Scotland’s community of landlords, it’s worth knowing that buy-to-let mortgages have seen a few changes. The Additional Dwelling Supplement (ADS) is still in place, meaning you’ll pay an extra 8% on top of the property price in Land and Buildings Transaction Tax (LBTT).
Interest rates for buy-to-let deals are higher than residential ones, sitting around 5.5% to 6.5% so far in 2025. Lenders assess affordability based on expected rental income, typically needing it to cover 125%–145% of mortgage payments at a stress-tested rate.
Getting Mortgage-Ready: What You’ll Need
Before you even start speaking to lenders or brokers, it pays to get your finances in order. Here’s what to do:
- Check your credit report with all major agencies (Experian, Equifax, and TransUnion) and fix any errors.
- Gather your paperwork: payslips, bank statements, proof of deposit, and (if you’re self-employed) tax returns.
- Use online affordability calculators to get a ballpark idea of what you could borrow.
- Budget for extras like legal fees, surveys, LBTT, moving costs and home insurance — it all adds up.
A growing number of Scottish buyers are also choosing to work with independent mortgage brokers, who can access exclusive deals and help navigate what can be a surprisingly complex market.
What’s on the Horizon for the Rest of 2025?
There’s cautious optimism that interest rates might start to ease slightly towards the end of the year, particularly if inflation continues to fall. That could open the door to more competitive mortgage deals, especially for buyers with larger deposits or those investing in energy-efficient homes.
Expect more lenders to launch green mortgages and additional support schemes for first-time buyers, as affordability remains a key concern. Shared equity and co-buying arrangements are also on the rise, giving more people a realistic path onto the property ladder in Scotland’s popular cities and towns.
Our Final Thoughts
Mortgages in 2025 are still a mixed bag, with higher rates than we’ve been used to, but a bigger, more flexible range of products than ever before.
Whether you’re a first-time buyer trying to scrape together a deposit, a mover looking for a family home, or a homeowner keen to cut your monthly bills with a remortgage, there’s plenty of opportunity out there.
The key? Do your research, get advice early, and work with a great solicitor and estate agent (we know a few…). With the right team and a bit of preparation, you’ll be well on your way to securing the perfect mortgage for your next chapter.
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