Find out more about the latest reduction and how it might affect you and your mortgage.
The Bank of England has voted to reduce the base rate from 4.75% to 4.5%. In today’s review, the reduction of 0.25% was agreed after much speculation. Many analysts predicted the reduction, and we hope there will be further base rate cuts this year.
So, what does the reduction mean for you?
• If you’re on a fixed-rate mortgage deal, your monthly payments will remain the same until your fixed term ends
• If you’re on a standard variable rate, your monthly payments may go down if your lender chooses to pass on the saving to you
• If you’re on a tracker rate, which moves in line with the base rate, your monthly payments will definitely go down
You might have noticed it’s been an interesting time for mortgage interest rates. Fixed rates crept up slightly at the end of last year and early into 2025, but inflation data was better last month, so rates may begin to improve.
Recent mortgage rate cuts
Earlier this week, several major lenders reduced rates, including Halifax, HSBC, Clydesdale Bank, and Barclays.
If you’re due to remortgage this year, don’t hesitate to get in touch if you have any questions. We’re very happy to run through your options. Remember, we offer a free market watch service. This means that we’ll lock in the best available rate for you now so that if rates go up, you’re protected. However, we’ll monitor the market for you, so if rates go down before your deal ends, we will re-submit your application at no extra cost to you. That way, you’re guaranteed to get the best available rate.
While this is a positive story overall, with rates sitting lower than two years ago, borrowers with five-year fixed terms ending this year will still be moving to rates higher than their current rate.
House prices are rising, though, and the market is expected to be buoyant this year. The next base rate review takes place on 20th March. We will keep you posted on any market changes.