Boe Cuts Base Rate To 4.25%: Will Mortgages Get Cheaper?

The Bank of England’s decision to reduce the base rate to 4.25% is welcome news for mortgage borrowers, as lower interest rates often lead to reduced mortgage costs.

Some borrowers will feel the benefits of the base rate cut imminently. Although some lenders have been slow to reflect the drop, further mortgage rate cuts are likely in the coming weeks. If the base rate continues on its forecasted path, we could see it fall to 3.75% by year-end. With increasing home-mover activity and a competitive mortgage market, now is a promising time for buyers to explore their options—especially as lenders may continue to reduce rates as the year progresses.

The base rate cut is great news for many mortgage holders. If you're on a tracker or variable mortgage that follows the base rate, expect your monthly repayments to decrease. Even if you’re on a fixed-rate deal, this cut brings optimism for more favourable rates when your current term ends. With lenders now more flexible under the Mortgage Charter, you can secure a new deal up to six months before your fixed rate ends—helping you plan ahead and avoid slipping onto a Standard Variable Rate (currently averaging 7.9%). Thinking of moving or remortgaging? Use tools like a Mortgage or Remortgage Calculator, or apply for a Mortgage in Principle to understand what you could borrow. Now’s the perfect time to review your mortgage options and make the most of the changing market.

Financial markets are currently predicting a further two or three potential base rate cuts during 2025. However, as always, this remains subject to change depending on developments in the wider economic landscape.